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Greece To Unwind Austerity Measures

by Lorys Charalambous,, Cyprus

14 July 2014

Greece's Finance Minister, Gikas Hardouvelis, has promised that the country's extraordinary taxes will be abolished as the country's economy normalizes, and that tax burdens will be reduced to levels comparable to those in other Eurozone states.

Hardouvelis, speaking at a conference in Vouliagmeni organized by The Economist, linked the moves to the modernization of Greece's tax administration, and he added that the Ministry is assessing the efficiency and social impact of the current tax situation. In June, it was revealed that a special tax on heating oil had led to a dramatic decline in consumption and created a budget hole of EUR400m (USD542m) in lost VAT and income tax.

The Minister also spoke about a new property register, links between cash machines and the Government's General Secretariat of Information Systems data center, and the introduction of rewards for consistently compliant taxpayers.

His comments follow the recent unveiling of the Government's Development Plan, which the Prime Minister, Antonis Samaras, said represents a "New Greece" of competition rather than statism. Samaras promised that taxes would be slashed "everywhere" over the next seven years, and that the tax system would become "more human" when dealing with taxpayers who were struggling to pay.

Samaras further explained that the Government's goal is to reduce corporation tax to 15 percent, the top rate of income tax to 33 percent, and to cut the reduced rate of value-added tax (VAT) to no higher than 12 percent.

TAGS: VAT rates | tax | economics | value added tax (VAT) | budget | corporation tax | ministry of finance | tax rates | Greece | tax reform | individual income tax

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