The Greek government will examine lowering tax rates for individuals and enterprises, cutting VAT and property taxes during a dialogue on tax reform which officially started on Monday. Finance Minister Evangelos Venizelos presented the framework of the tax reform and said that changes in taxation will have no effect on revenues, which means that lowering tax burdens will be accompanied by interventions to cover any such losses.

Finance Deputy Minister Pantelis Economou, said reforms will focus mainly on reorganizing the structure of Finance ministry, lowering VAT rates and cutting tax burden in the home building sector focusing on revitalizing the real estate market.

Finance Minister Evangelos Venizelos, commenting on VAT rates said: “If we adopt two VAT rates, 10 pct and 20 pct, this will mean a revenue loss of 1.8 billion euros. Therefore, any proposal must be accompanied by a guarantee of equal result as we do not have the room to miss any of our targets”. On capital taxation, Venizelos said that based on 2009 figures, real estate property owned by individuals, was worth 400 billion euros, or 170 pct of GDP. “We can understand what a fair taxation on property would bring,” he added. On income taxes, he said the government would like to adopt a fairer tax policy and said that corporate taxation was also on the agenda.
Venizelos said the finance ministry was checking bank transactions more than 100,000 euros and credit cards issued by banks abroad. Commenting on outstanding debt to the state, Venizelos said that new stricter rules -including jail terms - mainly concerned those with outstanding debt of more than 100,000 euros.

A dialogue with social agencies will continue until August 22. The government expects to have finalize its draft plan by September 15 and to present draft legislation by early October.