The government will reduce taxation on households and enterprises in 2017, Alternate Finance Minister Tryfon Alexiadis announced in an interview with Sunday’s Kathimerini. He stressed that the economy’s competitiveness needs to be improved, saying that with the high corporate tax rates applying today, “it’s like shooting yourself in the foot.” He also spoke of changes to the Single Property Tax (ENFIA) from 2017, with cultivated plots of land possibly being exempt, but with the same tax revenue target.
“At the moment, as a government, we have inherited a specific tax system and a financial and social situation from which we have to emerge implementing the bailout agreement. Yet I believe that if we want our economy to become competitive – as when you have high rates it is like shooting yourself in the foot – and today we do not have a fair system. There is overtaxation. We must therefore go to another structure of the tax system,” stated Alexiadis.
The structure he envisages takes into account what the country’s neighbors do, along with a fairer distribution of the tax burden via a shift in taxes from lower and middle incomes to higher ones.
“It is not possible to have high tax rates... in northern Greece... when just a few kilometers to the north the rates in European Union countries without customs borders are low. The only thing you manage to do this way is to destroy Greek enterprises or force them to move elsewhere,” said Alexiadis. He therefore argued that “from 2017, we need to address the issue of lightening the burden on citizens and enterprises, as well as that related to property.”
He reiterated the prime minister’s statement last month that ENFIA will undergo changes next year, “to make it more fair and proportionate.” Even though ENFIA will be amended or replaced in 2017, the revenue target of 2.65 billion euros per annum will remain the same, he noted.
Regarding arable land that is supposed to be taxed as of 2017, Alexiadis said: “We do not want to place a burden on agricultural production. A cultivated plot is one thing and a plot of great value in a tourism resort is quite another. For the new tax we will examine how we can strengthen agricultural production. One way might be to distinguish cultivated plots from others, but we have not yet reached a decision on that.”