BUSINESS

Higher taxes expected to bring in 1.35 bln euros of 1.8 bln shortfall

TAGS: Economy

Hikes on taxes on a slew of consumer products and services that will be presented to Parliament for ratification in the next few days are expected to bring in 1.35 billion of the 1.8 billion euros shortfall seen in revenues.

According to deal reached by the Greek government and international lenders, the hikes will include raising the top rate of value-added tax from 23 percent to 24 percent on many basic commodities, expected to bring 450 million euros into state coffers. Raises, however, are not expected on public utilities like water and electricity.

Industries will also have to pay more for unleaded gas, natural gas and butane, as taxes are also raised on various imported products such as coffee, as well as on tobacco.

Pay TV will also become more expensive for consumers, as too may Internet or mobile phone services and hotel accommodation.

The unified property tax, of ENFIA, is to be revised so as to place a bigger burden on the owners of multiple or large properties, while raises are also expected on the tax on bank checks, vehicle use and car imports.

The new measures are calculated to bring in 900 million euros, in addition to the revenues from the higher VAT rate.

Savings, meanwhile, of around 350 million euros are to be made by preserving the rule of one hiring for every five departures in the civil service and freezing promotions in sectors of the public administration that are in a higher salary bracket.

An additional 100 million euros will be cut from the defense budget to reach the overall target of 1.8 billion euros in revenues and savings the government needs to hit to satisfy creditor demands for a primary surplus of 3.5 percent of gross domestic product in 2018, as outlined in the latest bailout deal.

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