CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. IMF Urges Growth-Friendly Tax Cuts For Greece

IMF Urges Growth-Friendly Tax Cuts For Greece

by Lorys Charalambous, Tax-News.com, Cyprus

21 July 2017


The International Monetary Fund (IMF) has welcomed measures aimed at widening Greece's tax base, but has recommended that strict budget targets should be relaxed to allow for growth-friendly tax cuts.

On July 20, the IMF approved in principle a EUR1.6bn (USD1.8bn) stand-by arrangement with Greece, meaning that the funds will be released once it has received assurances from the European Union over debt sustainability, and it is sure that the Greek Government's policies are focused on restoring macro-economic stability.

In the process of approving the funds in principle, the IMF said that newly legislated measures broadening the "exceptionally generous" income tax exemptions "are critical to rebalancing the budget toward more growth-friendly policies."

Under these reforms, parliament has approved proposals to decrease the income tax allowance from 2020, as a result of which around half of taxpayers in Greece currently do not pay income tax, according to the IMF.

This measure, in tandem with moves to cut state pension entitlement, will go some way towards achieving the budget surplus target of 3.5 percent of GDP, the IMF said. However, it suggested that this "ambitious" target should be reduced so that tax rates can be lowered.

"[T]his target should be reduced to a more sustainable level of 1.5 percent of GDP as soon as possible, to create fiscal space for better targeting social assistance, stimulating public investment, and lowering tax rates to support growth," the Fund said.

TAGS: tax | investment | budget | International Monetary Fund (IMF) | tax rates | Greece | Europe

To see today's news, click here.

 
















Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »