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Taxes in favour of third parties and tax breaks are over

18 April 2011 / 19:04:10  GRReporter
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The government hopes to save two billion euros after cancelling the additional taxes to third parties that burden the end price of the products and services and make them uncompetitive. The Ministry of Finance should describe these taxes within a few days and then they would be evaluated to determine which of them should be kept and which should be cancelled. The evaluation criteria are social and economic and they will be updated constantly in order to avoid obsolete laws, which burden the end prices with no benefits either for the state, or the citizens.

The general definition of taxes to third parties in Greece is used for a series of taxes, duties and preferential reductions, most of which were established in the period 1920-1930. Their benefits are targeted at individual persons and legal entities, many of which do not exist today, or have been reformed. So, the money falls into the black hole of the state administration and its use can not be traced due to the lack of any transparency. Currently, the government has found out about 500 such taxes, but the economic analysts say they are at least 1000, and a full description of them is nearly impossible. They are disruptive to competitiveness as well as to inflation and investment incentives in various sectors.

According to representatives of the Ministry of Finance, the taxes to third parties are considered one of the biggest weaknesses of the economic system in Greece. They are not recorded in the statement of revenue, which led to the obscurity at present and namely where each of these taxes goes and why they are deducted. They were accumulated over a period of at least 30 years, and although insignificant in value they burden the end prices of most goods and services in the country. The Hellenic Chamber of Industry provided in late 2010 a list of at least thirty necessary changes so that the country becomes friendlier to entrepreneurship. The cancellation of taxes and duties to third parties, for GRReporter already wrote, were among those proposals.
  
The Ministry of Finance will revise the tax breaks that are more than 900 currently. According to Naftemporiki, half of those entitled benefit from them mainly to reduce their taxable income. Tax breaks affect costs incurred in health care, social security, education, rent and other items and will be cancelled for total family income that exceed 60,000 euros per year. The study of the Ministry of Finance shows that about 10,000 individual persons declared income of 8.8 thousand euros per year to save 461 euros through tax breaks. Other more than 169,000 people pay about 3,000 euros less, and declare about 44,000 euros. As for corporate taxation, over 10,000 companies pay a total of 650 million euros less each year benefiting from the current tax breaks. Other 255,000 small businesses pay a total of 185 million euros, benefiting from them too.

The breaks of the costs in the health sector deprive the state treasury of about 97 million euros each year as a result of tax reductions of about 814,000 people. Other 696,000 taxpayers were relieved of paying 68.5 million euros in taxes after having submitted additional costs for social security. The cost of tax breaks for buying first home is over 300 million euros and around 830 million euros are the tax benefits for ownership transfer, inheritance, donations and bequests.

Tags: EconomyMarketsTaxes to third partiesTax breaksCutsGreece
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