Cabi­net gives nod to plan

No ma­jor dis­sent over fis­cal scheme that will in­tro­duce range of new, higher taxes

Kathimerini English - - Front Page -

A medium-term fis­cal plan that will see Greek tax­pay­ers, par­tic­u­larly mid­dle-class ones, have their wages eaten away even more by ris­ing taxes was ap­proved by the Cabi­net yes­ter­day, as the gov­ern­ment now braces for what prom­ises to be a stormy de­bate and vote in Par­lia­ment.

Dur­ing a lengthy session yes­ter­day the Cabi­net ap­proved the new aus­ter­ity scheme, which seeks to raise via tax hikes and pub­lic spend­ing cuts close to 6.5 bil­lion eu­ros this year. The plan runs to 2015, by which time the Greek gov­ern­ment hopes to have saved al­most 30 bil­lion. Athens hopes that this will be enough to se­cure a sec­ond bailout that will re­port­edly be worth be­tween 90 and 120 bil­lion eu­ros.

Al­though the de­tails of the midterm plan will not be known un­til it is sub­mit­ted to Par­lia­ment, sources said that one of the key mea­sures will be an ad­di­tional in­come tax, that will ap­ply retroac­tively. Tak­ing ad­van­tage of the fact that 2010 tax dec­la­ra­tions have not yet been pro­cessed, the gov­ern­ment will im­pose an ex­tra tax of be­tween 2 and 4 per­cent on in­comes from last year. The sup­ple­men­tary tax will last at least un­til 2015.

Prop­erty tax will also in­crease. Cur­rently, home­own­ers with prop­er­ties val­ued at un­der 400,000 eu­ros by the tax of­fice are not taxed. How­ever, the thresh­old will plum­met to 200,000 eu­ros un­der the new mea­sures.

A rise in taxes on ve­hi­cles with large en­gine ca­pac­ity is also on the cards, as is a rise in val­ueadded taxes for restau­rants and cafe­te­rias. One is­sue that ap­peared to re­main un­re­solved was whether the duty on heat­ing oil would be in­creased so it matches the tax on gaso­line.

The cabi­net meet­ing passed with­out any ma­jor ob­jec­tion to the mea­sures from the min­is­ters who took part. Fi­nance Min­is­ter Gior­gos Pa­pa­con­stanti­nou gave them an op­por­tu­nity to ex­press their views on the mea­sures, which are likely to be voted on in Par­lia­ment next week.

Al­though the gov­ern­ment has a six-seat ma­jor­ity in Par­lia­ment, its deputies have been grow­ing in­creas­ingly vo­cif­er­ous in their op­po­si­tion to Greece’s eco­nomic pol­icy and the in­ter­ven­tion of the Euro­pean Union and the In­ter­na­tional Mon­e­tary Fund. Prime Min­is­ter Ge­orge Pa­pan­dreou got a taste of this op­po­si­tion when he chaired a marathon session of PASOK’s po­lit­i­cal coun­cil on Wed­nes­day. The meet­ing be­gan in the evening but did not end un­til 3 a.m. yes­ter­day. PASOK mem­bers were par­tic­u­larly in­sis­tent on be­ing told whether Greece’s new bailout will mean the coun­try’s as­sets be­ing put up as col­lat­eral or whether for­eign of­fi­cials will have a say in the pri­va­ti­za­tion pro­gram.

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