Greeks Shut Up Shop Over Government Tax Policies

Ulrika Lomas, Tax-News.com, Brussels

28 October 2008

The government's new tax policies have provoked anger in Greece where shop-keepers have shut their doors and self-employed individuals have taken to the streets in protest against the loss of a valuable tax break.

The protest was against a move by the Finance Ministry scrapping a EUR10,500 tax allowance for the self-employed, which, according to the government, was used by trades-persons and well-paid professional workers to escape income tax altogether by under-declaring their income.

The Greek government claims that tax evasion is widespread and that it loses billions of euros every years as a result of the 'black economy'.

In August, Finance Minister George Alogoskoufis announced a raft of new revenue-raising measures as part of a deficit reduction package, although it also signalled that corporate and individual income tax rates would fall by 5% over the next five years.

The fiscal plan calls for a new 10% tax to be imposed on capital gains made from selling shares, and a new 10% tax on stock dividends, both applicable from January 1, 2009. The existing 0.15% share transaction tax will be gradually phased out from next year.

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