BUSINESS

Popular measures in pipeline

TAGS: Politics, Finance

The government is planning to submit to Parliament the first batch of handouts and tax discounts based on Prime Minister Alexis Tsipras’s announcements at the Thessaloniki International Fair in September, with an eye on next year’s general election.

The Finance Ministry has completed the preparatory work for drafting the clauses seen reducing the Single Property Tax (ENFIA) in 2019 by 10 percent on average for properties up to 150,000 euros in objective value terms (prices used for tax purposes).

The upcoming bill will also provide for the reduction of the corporate income tax rate from 29 to 28 percent next year and 25 percent by 2022, as well as reducing the dividend distribution tax.

The draft law will be submitted to the House before the completion and publication of the European Commission’s report on next year’s budget and before the definitive decisions to be reached at an extraordinary Eurogroup meeting that will probably take place on November 19.

In fact it is possible that this bill may be passed but not implemented, as may well be the case with the law on the reduction of pensions as of 2019. This is because there appear to be some notable differences between the calculations on the primary surplus of 2019 by Athens and Brussels. The gap between the different estimates comes to 720 million euros, or about 0.4 percent of gross domestic product.

The Finance Ministry argues the primary surplus will be significantly above the target of 3.5 percent of GDP even without the pension cuts and with the implementation of the measures Tsipras announced in Thessaloniki, and will suffice to finance the extra handouts.

After mid-November the government is expected to submit some more clauses to Parliament, providing for the reduction of the social security contributions that professionals pay, which is the only bill certain to be implemented even without the approval of the country’s creditors.

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