BUSINESS

New austerity measures coming

Increased taxes on property owners with assets worth more than 400,000 euros, a reduction in allowances paid to public servants and a levy on soft drinks are among the options the Finance Ministry is looking into as a means of saving 26 billion euros until 2015.

With representatives from the European Commission, European Central Bank and International Monetary Fund having left Athens for a short period, the ministry is looking for ways to find 6 billion euros? worth of savings or revenues for the year in a bid to convince investors that Greece is on track to reducing its deficit by 2015.

According to sources, the government is looking at lowering the tax-free threshold for property owners. Currently, only those with assets worth more 400,000 euros are hit with a property levy, however, the ministry is looking into dropping this cut-off mark to 300,000 euros.

If implemented, the measure will apply from 2010, which means that property owners will have to pay backdated taxes as of January last year.

The government is also considering increasing a tax paid on large property portfolios, which means assets worth more 400,000 euros, a source added.

Government data show that about 150,000 taxpayers in the country own assets worth more than 400,000 euros.

Other options the ruling Socialists are looking into in an effort to bump up revenues is through the introduction of levies on natural gas and soft drinks, as of the start of next year.

With the country in its third year of recession and consumption and investment activity falling, Greece is struggling to bring in revenues, which fell short of annual targets early in the year.

Government figures for the first four months of 2011 show that net ordinary budget revenue totaled 14.46 billion euros, down 9.2 percent year-on-year, compared with a January-April target of 16.34 billion euros.

Other planned revenue-raisers the government is eyeing is upping several goods from the lower 13 percent value-added tax group to the higher 23 percent group.

The reduction of tax breaks for first-home buyers is also being examined, the source added.

The ministry is expected to unveil its medium-term 2011-15 strategy aimed at helping restore the country?s fiscal health in the next few days.

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