BUSINESS

Greek MPs back delaying tax hike for migrant-hit isles

TAGS: Economy, Politics

Greek lawmakers approved Wednesday a delay in hiking sales tax on islands struggling with an influx of migrants, a measure that has triggered a row with the debt-ridden nation's creditors.

All 259 MPs present voted for the measure, which keeps until 2018 the maximum sales tax threshold at 17 percent, compared to 24 percent in the rest of the country.

It will apply to the eastern Aegean islands including Lesvos, Chios, Samos, Leros and Kos, which saw massive arrivals of refugees and migrants last year and still hold more than 16,000 people in overcrowded camps.

The tax delay – which Greek authorities estimate will cost the state 50 million euros ($52 million) – is part of state handouts that have caused a row with the country's creditors.

The measure was announced earlier this month, alongside a one-off bonus to the poorest of pensioners, after the government found itself with a 1-billion-euro tax surplus.

Leftist Prime Minister Alexis Tsipras said previously it was his administration's policy “to return every single euro of surplus to the weakest.” But Greece's international creditors said they had not been fully informed of Tsipras's intentions ahead of the announcement.

In response, the eurozone group says it will suspend a recently-announced debt relief scheme for Athens.

Greece is in the middle of a fiscal evaluation by the creditors to unlock fresh funds from its 86-billion-euro bailout.

[AFP]

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