Greece Unveils Tax Reform Programme

by Ulrika Lomas, Tax-News.com, Brussels

12 February 2010

The Greek government has unveiled details of its austerity programme, containing a raft of tax measures to enable the country to exit the financial crisis and to protect it from potential insolvency.

Determined to dramatically reduce escalating state debt, the government has announced a series of tax increases, together with a freeze on public sector wages and recruitment.

Finance Minister George Papaconstantinou emphasized that there would be a crackdown on tax evasion in Greece, and called on everyone to contribute to combating the widespread problem.

Other measures outlined by Papaconstantinou include abolishing existing tax breaks and special tax rates accorded to certain professions, and introducing a capital amnesty. Provided that Greek nationals, with capital held abroad, repatriate their funds within six months, only a 5% tax will be levied, he stated. The money will then be legalized, he added.

The government also unveiled plans to introduce a new tax on real estate, to increase taxes levied on offshore companies, dividends and fuel, and to impose a 40% tax rate on income in excess of EUR60,000 (instead of EUR75,000 currently).

Greece is to regularly update the European Union in Brussels on its budgetary progress. Athens is determined to reduce new debt from almost 13% currently, to 3% by 2012. The German government has provided assurances recently, however, that Greece will receive help from the eurozone in the event that these latest efforts fail.

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