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Greece's Prime Minister Promises Tax Cuts

by Lorys Charalambous, Tax-News.com, Cyprus

13 January 2015


The Prime Minister of Greece, Antonis Samaras, has highlighted plans for "significant" tax cuts, which he would introduce over the medium term if his New Democracy Party remains in power following a snap election scheduled for later this month.

In a speech on plans between now and 2021, Samaras said that all taxes will be reduced, but that the cuts will be introduced gradually to keep deficits at bay.

The Prime Minister previously outlined a "road map" for tax reform in September. In his new speech, he repeated a pledge to reduce corporation tax to a flat rate of 15 percent and to cut the top rate of income tax. However, in his latest speech, he said that the new top rate will be 33 percent, one percentage point higher than the 32 percent figure given in September.

Samaras also explained that the country's consolidated property tax, known as ENFIA, will be reduced until it amounts to just 1 percent of gross domestic product (GDP), rather than 1.4 percent. Revenue from the tax will go directly to local governments.

The Government may also double a concession for small firms, passed by Parliament earlier this year, which allows small businesses to opt not to levy and account for VAT on their supplies if their turnover is less than EUR10,000 (USD11,800) in the preceding tax year. This would be raised to EUR20,000. Purchasers of first homes may also receive VAT breaks. There will also be incentives to repatriate capital, he said.

The New Democracy Party currently leads a coalition government with the socialist Pasok (The Panhellenic Socialist Movement) as its junior partner. The election has been called because Parliament was unable to agree on a new President in December. The far left-wing opposition Syriza coalition currently has a narrow lead in opinion polls.

TAGS: tax | business | value added tax (VAT) | property tax | corporation tax | tax rates | Greece | tax reform | individual income tax

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