FinMin details latest tax hikes, reforms in Mid-term Fiscal Strategy Framework

The Greek government will soon present draft legislation towards merging and closing several public sector agencies, Finance Minister George Papaconstantinou said on Friday.
Presenting the government’s Mid-term Fiscal Strategy Programme during a press conference, Papaconstantinou said the government will introduce a new payroll system for civil servants, one which features a three-year adjustment period for existing employees.
The FinMin said a plan to merge or close down public sector agencies would be reviewed on a quarterly basis and said that among other measures to be introduced in the public sector are a "labour reserve", while he left the door open for lay-offs in the public sector.
Papaconstantinou said an extra charge on incomes would be introduced from this year and will total 3 or 4.0 percent, while it will be applied throughout the mid-term programme. He noted, however, that the measure could be withdrawn earlier if alternative revenues arose, such as higher revenues from an effort to combat tax evasion.
Presenting the main points of the latest austerity, the Greek minister said:
- it raises existing living standards tax criteria, imposing an special tax on wealth, imposing higher taxes on beverages, lifting bank confidentiality for all persons with political or civil service, introducing an extra duty on financial transactions (the issue was currently examined in discussion with banks), imposing a special consumption tax on natural gas, introducing a 3.0-pct contribution against civil servants’ salaries and a roughly similar tax on wages in the private sector and on self-employed incomes to support employment. The government will also introduce an extra tax charge on swimming pools, pleasure craft and large real estate holdings, along with a 10-pct increase vehicle car registration fees.
Papaconstantinou said the ministry will present a new taxation law in September, aimed at simplifying an existing law and introducing lower VAT rates and cutting corporate tax rate.
The Mid-term Framework will be voted in Parliament by the end of June, Papaconstantinou said, adding that these measures were necessary preconditions for the release of the fifth tranche of a 110-billion-euro loan agreed with the EU, the ECB and the IMF.
“The government has opted the hard way, regardless of any political cost,” the FinMin said, adding that “either we fix the current situation, or this country has no future”.

ND bashes latest gov't plan

The main opposition New Democracy (ND) party lashed out at the government on Friday, rejecting the medium-term programme unveiled by Finance Minister George Papaconstantinou.
ND spokesman Yiannis Mihelakis stated that this is a tangible confession that the Memorandum policy has failed and described the measures announced by the government as unreliable, unfair and ineffective.
Mihelakis stressed that a new package of tough measures will be announced soon considering that the medium-term programme - which is characterized as unfair because it includes the imposition of horizontal taxation on those who already shoulder most of the burden - will fail.
ND stressed that the “new tax raid” manifests through the abolition of almost all tax exemptions, the imposition of a "poll tax" even on low incomes and the VAT and car registration fee increase, accusing the government of proceeding with further wage and pension cuts.
“The attack on the most vulnerable section of society has taken up horrifying dimensions while nothing is being done to reduce unemployment,” Mihelakis stressed.
The ND spokesman left no room for a consensus accusing the government of seeking to table the medium-term programme for vote in Parliament as a single article.
“The government’s ‘all or nothing’ attitude shows no will for consensus and confirms its already known blackmailing arrogance,” he stressed.

Bakoyannis calls for snap elections

Former foreign minister Dora Bakoyannis, who formed her own Democratic Alliance party after being expelled from main opposition New Democracy (ND) party, on Friday stressed that the country has been left rudderless and, in essence, the government has collapsed.
Bakoyannis said the new tax measures announced by the government are unfair and unreasonable.
Referring New Democracy (ND), she stressed that “it carries its illusions around Europe; European leaders are trying in vain to bring it back to earth.”
Bakoyannis said neither of the two major parties can shoulder the burden of any re-negotiation of the Memorandum, or implementation of necessary changes and reforms.
“The only choice for the country is to hold elections now ... Immediate elections would overturn the political deadlock, leading to the necessary collaborations,” Bakoyannis underlined.   

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