Gov’t plans prop­erty tax changes

Kathimerini English - - Focus -

The gov­ern­ment is con­sid­er­ing a new prop­erty tax to re­place the ex­ist­ing ENFIA af­ter 2018, whose cal­cu­la­tion will be based not only on the value of each tax­payer’s prop­erty as­sets but also on their an­nual in­come.

The new tax, which is seen pro­duc­ing rev­enues of about 1 bil­lion eu­ros less than ENFIA’s 2.65 bil­lion per year, is ex­pected to be in­cluded in a pack­age of tax cuts whose en­force­ment will only be al­lowed if the fis­cal tar­gets are met. The gov­ern­ment’s aim is for the new tax to partly off­set the losses salary work­ers, pen­sion­ers and farm­ers in­cur from the re­duc­tion of the in­come tax dis­count and pen­sions. The plan will form part of the ne­go­ti­a­tions with the coun­try’s cred­i­tors set to start in Athens on Tues­day. The Greeks won’t have an easy time get- ting the cred­i­tors to sign off on the new tax though, as they would pre­fer to see a drop in the in­come tax rates of tax­pay­ers and cor­po­ra­tions. More­over, to date ENFIA has con­sis­tently de­liv­ered the rev­enues it prom­ises, and the cred­i­tors are gen­er­ally not par­tial to changes and in­ter­ven­tions, to say noth­ing of the fact that the gov­ern­ment’s plans lead to an ex­tra bur­den on medium and high in­come earn­ers. Ac­cord­ing to the cred­i­tors, th­ese two groups de­serve some re­lief, as they have al­ready suf­fered con­sid­er­ably.

The prime min­is­ter’s of­fice has de­lib­er­ately leaked de­tails say­ing that the tax to re­place ENFIA will fetch 35 to 40 per­cent less rev­enue into the state cof­fers and will be based on data from the As­set Reg­is­ter (“Pe­ri­ousi­olo­gio”), which will con­tain in­for­ma­tion about the all the prop­erty hold­ings of each tax­payer and will be­come fully op­er­a­tional from Oc­to­ber 2018.

The rea­son­ing be­hind the gov­ern­ment’s plan is that com­bin­ing the value of prop­erty as­sets with in­comes would of­fer a bet­ter pic­ture of tax­pay­ers’ abil­ity to pay, in turn al­low­ing for the re­bal­anc­ing of the prop­erty tax. The in­ten­tion is to ex­pand the num­ber of prop­erty own­ers that pay prop­erty tax with the in­clu­sion of all prop­er­ties with­out ex­cep­tion, and with the abo­li­tion of ex­emp­tions or spe­cial sta­tuses that cur­rently ap­ply with ENFIA. The new sys­tem is seen be­com­ing op­er­a­tional af­ter the ad­just­ment of the prop­erty values used for tax pur­poses (known as “ob­jec­tive values”) to mar­ket rates.

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