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Greek PM Promises Tax Reform

by Lorys Charalambous,, Cyprus

05 December 2012

Greece's Prime Minister Antonis Samaras has spoken about his government’s tax plans, dismissing rumors that the top rate of income tax rate will in future apply to incomes as low as EUR25,000 and promising measures to eventually lower tax rates.

Samaras was speaking at a conference organized by the Hellenic-American Chamber of Commerce on December 4. He suggested that the tax burden on businesses would fall, and that an overhaul of the personal income tax system would provide tax relief for most wage earners under new plans being considered by the government. There would also be tax benefits for families with one or more children, although based on need.

Along with lower taxes, the prime minister promised a simpler tax system, technological innovations such as a real-time electronic VAT payment system, and severe punishment for non-compliance.

Samaras also envisioned a new business environment, noting the obstacles of bureaucracy and corruption faced by anyone seeking to start a business in Greece. He added that it was time for Greece to exploit its energy resources.

The prime minister also pointed out that Greece's debt restructuring had been the largest in history and yet had not led to bankruptcy, and he ended his speech by looking forward to the "rebirth of Greece."

Samaras and Finance Minister Yannis Stournaras are currently in the process of hammering out the final details of a tax reform plan acceptable to left wing parties in the fragile governing coalition and Greece's bail-out creditors.

While the government's coalition partners have been calling for cuts in tax for low and middle income earners worn down by years of austerity, the European Union and the International Monetary Fund are insisting on tax reform that widens the tax base, cracks down harder on tax evaders and ultimately raises more in revenue.

The governing parties are due to debate the tax reform plan in the coming days.

TAGS: compliance | tax | business | value added tax (VAT) | tax compliance | tax avoidance | fiscal policy | budget | corporation tax | tax rates | Greece | tax reform | individual income tax

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