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Parliament approved the new tax law

12 January 2013 / 18:01:56  GRReporter
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The new tax law was voted in Parliament shortly after midnight. Articles 1, 3, 6 and 10, for which SYRIZA requested a vote by names, were adopted with a majority. Costas Skandalidis and Andreas Loverdos voted "for". Previously, in his speech to lawmakers, Finance Minister Yiannis Stournaras noted that the tax law is a prerequisite for the granting of the next instalment. He said that this law will save money in a fair manner, since the gap of 2.3 billion euro will be filled. These funds would otherwise have to come from further cuts in pensions and salaries. The Minister emphasised that, due to the important support of the government parties, significant improvements have already been observed - such as the expansion of the tax base and a more equitable distribution of tax burdens, while the burden for workers and retirees was reduced by 100 million euro, compared to last year. Regarding protests by Notis Marias of the Independent Greeks party, Stournaras said that the debt had been reduced and this would be of benefit for future generations, also that it would be irresponsible to allocate the debt. The Minister said that Marias is a populist who plays with the pain of the Greek people.

According to Yiannis Stournaras, the majority of proposed changes cannot be accepted, because of their high social costs. He spoke about the sacrifices of the Greek people and gave a series of examples of cutting debt and reducing interest, which he called "gifts to Greece." The Minister of Finance said that the budget has overfulfilled the targets and deposits have returned to the country. He denied SYRIZA's accusations regarding legislative measures and, in turn, accused the party of unconstructive behaviour, since it says "no" to all proposals. Speaking about the upcoming meeting of the largest opposition party's leader with German Finance Minister Wolfgang Schaeuble, Stournaras said that SYRIZA behaves differently at home and abroad.

Previously, MP Panagiotis Lafazanis of SYRIZA accused the Minister of not answering questions from the opposition, and, in particular, on the issue of the 300 cleaners who were dismissed by the Ministry of Finance. Lafazanis said that they cannot establish companies, since they are not entrepreneurs. Stournaras replied that the Ministry offered that these cleaners be legally employed by a company, and called Lafazanis's attempts to pretend to be sympathetic on behalf of these poor women pathetic.

Deputy Minister of Finance George Mavraganis defended the law's provisions and assured that the government will not allow tax evasion to remain unpunished. He noted that tax relief is provided for those who work under a labour contract and retirees with annual incomes below 25,000 euro, and the new way of business taxation is fairer, since taxation will take into account expenditures as well. Civil contract workers will now belong to the category of those who work under a labour contract. All incomes will be declared and documents will not be rejected unless authorities can prove these. Voluntary VAT taxation on business rents will be introduced, the Deputy Minister added.

Prognoses about joint stock companies are unfavourable. The nominal tax rate will increase from 20% to 26%. According to Mavraganis, however, "companies also have their share in the distribution of the tax burden." The total burden for firms, however, will decrease from 40% to 32% due to the system of dividends' taxation. Taxation on general partnerships will amount to 100% per company, and, if they want, their tax may be equalised with the tax of limited companies. Limited partnerships will be taxed at a rate of 20% for most of their profits. Mavraganis added that these measures are difficult, but they will help the country.

Dora Bakogiannis, member of New Democracy, expressed her concern about the tax law. She stressed that attempts for financial recovery should be more productive. Bakogiannis admitted that the results of the rescue programmes are indisputable, as well as the change in partners' views of Greece, and the start of repayment of government debt to the private sector, the liquidity of which affects the market. She regretted, however, the fact that a single deep tax reform that will lead to a stable and fair tax system is not being discussed. The practice that supports an unstable tax environment is still continuing. Family budgets are constantly changing, workers and retirees do not know what to expect, Dora Bakogiannis said. She stressed that tax rates and tax assessments of real property should decrease because the state needs to raise more money. Bakoyannis requested a new government initiative in terms of heating fuel, and predicted that the return of the fuel tax and fines, which the EU will impose in relation to pollution from heating stoves, will eventually lead to a negative grand total for the state.

Tags: Yiannis Stournaras George Mavraganis Panos Kamenos Aleka Papariga Dora Bakogiannis Nikos Mihaloliakos tax law
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