Market calling for tax reduction

In a letter to the new finance minister, the Athens Chamber of Commerce and Industry (EBEA) has asked that the standard corporate tax rate be reduced to 15 percent and remain there for at least five years.

The letter signed by EBEA president Constantinos Michalos also calls for the tax on company turnover not to exceed the 40 percent mark, explaining that a tax reduction would not entail a drop in state revenues, but in fact slow the current rate of companies going under.

Such measures would also play a defensive role for the economy by reducing the number of companies emigrating to countries such as Bulgaria and Cyprus, whose corporate tax rates stand at just 10 percent.

Michalos further reiterated his call for the value-added tax on food catering to go down from 23 to 13 percent, as last year’s VAT hike has resulted in a drop in consumption and the loss of more than 100,000 jobs.

Turnover in the sector declined by a considerable 24 percent in the first quarter of 2012 compared to the same quarter in 2011, while in the last quarter of 2011, when the new VAT rate was applied to food catering, the drop was 18 percent on an annual basis. In rival tourism destinations, the VAT on food catering is much lower: In France it is 5.5 percent, in Spain, Cyprus and Turkey 8 percent, in Italy 10 percent and Portugal 15 percent. 

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