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Tax increases in exchange of the first €2 billion tranche

11 October 2015 / 19:10:01  GRReporter
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The government has released to the public the first bill containing measures. The aim is to wrap up the discussion by Monday and lodge the bill in parliament. Thus, compliance with the agreed timetable and measures will be proven. The draft is expected to pass next week and thus unlock the €2 billion tranche. Passing it will also send a message that the government intends to meet its commitments with the creditors.

The bill includes measures concerning taxation, health, energy, and privatisation. It is the first step towards the completion of the vetting by the troika. If passed, and if the creditors are happy with it, the Eurozone will sketch out a second package of measures for Greece to adopt by late November. The official deadline to vote on the bill is 15 October, but a little delay is possible.

On 20 October, the heads of the institutions will descend on Athens for a discussion within the first formal review of the bailout. The creditors' technical teams are already in Greece vetting the progress on individual measures and the overall implementation of the memorandum.

The bill provides for an increase in taxes on rent income. Today's rates are 11% on rental income up to € 12,000 and 33% on income above that amount. After the increase, rates will go up to, respectively, 15% and 35%.

Regarding bank deposits it will automatically freeze up to 100% in the case of non-payment of VAT in excess of €150,000.

The bill contains a transitional provision affecting those who have tax liabilities. Their cases might also be shut if they pony up the entire amount plus fines. The latter, however, may be reduced to 50%.

Debtors enlisted in the 100 instalments regime must meet their current liabilities to stay eligible. They might have do so faster than anticipated as the previous three-month period has practically been reduced to a month according to the new provision. Another clause is added, according to which the government might relieve the instalments at any time, if possible. As far as the single real estate tax is concerned, properties will be charged from the first euro, i.e. there will be no exempt minimum.

Tags: draft law measures tax increases creditors tranche
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