Greek Lawmakers OK Tax Hikes

Greek Lawmakers OK Tax Hikes

Tax ReformsMoving to quickly satisfy international lenders, the Greek Parliament has approved a series of unpopular tax hikes and reforms to increase government income, one of the main conditions to qualify for continued aid from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB).

After debating long into the night, 162 of the 300 MP’s voted to approve the package put together by the wobbly coalition government led by Prime Minister Antonis Samaras, the New Democracy Conservative leader. Opponents condemned it as an assault on the country’s struggling middle class.

The bill comprises 24 changes, including reducing the number of tax brackets to three from eight with a new top rate of 42 percent for individuals who earn 42,000 euros or more a year. That comes as the government has been criticized by the Troika for failing to go after tax evaders and those with secret accounts in foreign banks, who may be offered amnesty and an 8 percent tax rate.

Other changes include cutting the corporate tax rate to 32.8 percent from 40 percent and imposing a 20 percent capital gains tax on Greek stocks from July 1. The changes place more of the payment obligation on businesses, especially the self- employed, reducing the burden on employees and pensioners by 100 million euros compared with 2012, Finance Minister Yiannis Stournaras said. The government hopes the measures will bring in about 2.5 billion euros ($3.3 billion) in additional revenue in 2013 and 2014.

Stournaras told lawmakers: “It is a bill of fiscal necessity and responsibility, required for us to get our next bailout tranche,” referring to continued loans from the Troika, some 52.5 billion euros ($69 billion) of which have started to be disbursed. “We are not in favor of taxes,” Deputy Finance Minister Giorgos Mavraganis said. “But in the current situation we must lead the country out of its impasse. Once we achieve stability we will proceed to cut taxes and simplify the system.”

The tax reform is part of an overall 13.5 billion euros ($17.45 billion) austerity package that Athens passed in November, 2012 to qualify for further bailout funds and avert bankruptcy. Critics accused the government of heaping unbearable burdens on ordinary Greeks while giving the rich an easy ride, with the main opposition Coalition of the Radical Left (SYRIZA) saying austerity has “demolished the country’s middle classes.”

“This is a bill that puts into action a plan of destitution. Seven hundred thousand Greeks can’t pay their electricity bills, there are three million poor people in our country and 57% of our youth is unemployed,” said Panos Kammenos, head of the anti-bailout Independent Greeks party. Stournaras promised to return with a bill to go after tax cheats, possibly including mandatory jail time instead of suspended sentences, which is all the law allows now.

  • Alex

    Pop quiz for economics wizard Andy Dablis of the USA. Are the people in Greece primarily poor because:

    a. The corruption of rich businessmen and non-communist government officials as Syriza communists like to claim? Had we not had corruption and tax cheats we would actually all have been fabulously wealthy from exporting virgin olive oil and serving tequilas with little umbrellas to drunk tourists.

    b. Their own incompetence, illiteracy and laziness? Our poverty is in fact primarily the result of our own bad choices to study fields like souvlaki turning, government “social scientist” and over payed underskilled union mobster that paralyzes our economy every five minutes with strikes…. rather than say focusing on electrical engineering, mathematics, and biotechnology to produce globally in demand products in fair trade?

    Enquiring mines want to know where you think  wealth primarily comes from Andy Dablis of the USA.  Sitting around waiting for handouts from the government (i.e. other Greeks) like communist Tsipiras preaches and leftists  like you encourage… or working to produce wealth ourselves?

    Comrades rather than focusing on personal production I say we have vote where we agree to equally share wealth regardless of our contributions to this world.  We should start with the personal belongings of Andy Dablis of the USA. Seeing as he as far more things than most poor Greeks.we should show up in his home and take all his worldly positions away. Clearly he  did nothing to earn his wealth. It was all stolen from the poor. Poor people carry absolutely no moral responsibility for their own lives.. Its greedy people like Andy Dablis of the USA who are to blame for our personal economic ills. We are all victims to Andy’s corrupt thievery.

  • worldarts

    Mr. Kouvelis is a complete traitor to his party own ethics and country, he’s no more than Samaras’ poodle lap dog, thrown a few small bones to serve his master— What a joke and total FRAUD the whole Coaltion has become! 

  • worldarts

    Alex….How can you give us a “pop quiz” when you are already giving all the answers with your own biased opinion?  Thank you. We’re all refreshed and challenged by your unique point of view, but if I throw you a stick will you leave?!