Greece offers no increase in taxes to attract investments

ATHENS, June 6, (RTRS): Greece is offering big investors more than a decade of no increases in their taxes, in an effort to promote entrepreneurship in a country struggling to return to growth after almost seven years of recession.

Greece has been imposing austerity, as part of three consecutive bailout programmes, since 2010. Partly as a consequence, gross capital formation, which shows inventory replacement and spending on fixed assets such as buildings and machinery, has declined about 65 percent since 2006.

To reach 2009 levels of fixed capital formation, Greece would need to invest at least 79 billion euros ($90 billion). That is more than it can afford, the finance ministry said last week, when it submitted a draft law that offers different incentives for setting up a business.

Under the law, investment plans exceeding 20 million euros and creating at least 40 new jobs could choose a stable tax regime with no tax increases for 12 years once the investment is concluded.

Alternatively, they can apply for a subsidy, amounting to 10 percent of the plan and up to 5 million euros, either in cash or in the form of a tax exemption.

In both cases, the investments can be eligible for a fast-track licencing process.

“Big foreign investments don’t need funding. They need stability,” Economy Minister George Stathakis told reporters, presenting the proposed law.

“If a Greek government raises taxation, they will be protected. But if taxation goes down, they will enjoy the same favourable treatment that will apply to the others.”