The Greek government plans to lighten the burden on taxpayers and enterprises with a new tax legislation to be put on public consultation next week and scheduled to be ratified in Parliament by the end of the month, Finance Minister Christos Staikouras said.Speaking to Skai TV on Thursday night, Staikouras said the ministry was examining plans to introduce incentives for taxpayers to demand receipts from specific categories of professionals with high tax-evasion rates.
He noted that taxpayers with annual income up to 8,500 euros will have a 20 pct reduction in tax, while for annual incomes more than 26,000 the tax reduction will be at one-digit percentage rate. Finally, for enterprises and particularly medium-sized the tax reduction will reach 41 pct.
“Our priority is the help medium and low incomes,” Staikouras said, presenting the guidelines of the new tax legislation which envisages, among others: a reduction of the low tax rate from 22 pct to 9.0 pct for annual incomes up to 10,000 euros.
The tax rate for annual incomes between 10,000 and 20,000 euros will be 22 pct, while all other income tax rates will be lowered by one percentage point. A corporate tax rate will fall from 28 pct to 24 pct and a capital gains tax will be lowered from 10 pct to 5.0 pct for dividends to be distributed in 2020.
The ministry also plans to suspend for a period of three years VAT payment for all new buildings with a building license from 2006 and introduce a 40 pct discount on spending in building repair works from income tax. Also to introduce more favourable terms of tax debt settlement offering up to 48 tranches.
The ministry also plans to offer a special incentive status for foreigners with their tax base in Greece (based on the Italian model) to attract investments. Also to offer a 10 pct reduction of tax to agricultural cooperatives.
Staikouras also referred to two more measures promoted by the government: lowering of social insurance contributions and granting 2,000 euros for each child born from 2020 onwards. Both measures will be included in other draft legislations.
The Finance ministry will also reach decisions on cars next year, taking in mind a community directive, a fleet renewal and introducing incentives for electric cars.
Staikouras said the government planned to settle all state arrears to the private sector -more than 2.0 billion euros- within the next two years.
He added that the November figures on state budget execution will show whether the government will present an excess budgete surplus this year.