BUSINESS

Government to submit provision for slashing ENFIA tax by 20 pct in August

PROKOPIS HATZINIKOLAOU

TAGS: Economy

Seeking to lift some of the burden on property owners and to expedite its relief measures, the government is planning a 20 percent reduction of the highly unpopular ENFIA tax as of this year.

The total cost of the cut has been estimated by Finance Ministry experts at around 565 million euros. Of this amount, 265 million euros have already been earmarked in this year’s budget by the previous government – leaving an additional cost of 250-280 million euros, which will be covered by this year’s budget.

The measure will abolish a provision introduced by the previous leftist government, which envisaged the reduction of the ENFIA tax by 10 percent on average for 2019 which, however, only applied to owners of properties worth up to 200,000 euros. This meant that 470,000 owners, who pay for almost 50 percent of the total property tax, were left out of the reduction plan.

On the other hand, the new provision of the center-right government envisages a reduction of 20 percent for all property owners in their entirety in 2019. The reduction in 2020 will be 10 percent.

The specific provision for the reduction will be included in the mini-tax bill that will be submitted and voted in Parliament in early August.

Moreover, according to reports, the government also plans to proceed with the slashing of corporate tax rates from 28 to 24 percent for income in 2019.

According to sources, this measure will not burden this year’s budget, but that of 2020.

Both these measures – the reductions of property and corporate taxes – reportedly find Greece’s creditors in agreement in principle, as they are viewed as growth-friendly.

The same bill will include changes to the 120-installment scheme for settling debts in taxes and social security contributions to make it more attractive.

According to the most probable scenario, the scheme will also allow businesses with debts of up to one million euros to take part.

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