BUSINESS

Income tax deposit reduction is due soon

TAGS: Finance

The exact reduction of the corporate income tax deposit rate will be announced by late June or early July , Finance Minister Christos Staikouras told Skai TV on Saturday.

Staikouras reiterated that the reduction – from the current 100% rate – will be “generous” and will mainly concern businesses hurt by the health crisis.

Staikouras said all other tax interventions will be explained by Prime Minister Kyriakos Mitsotakis at the Thessaloniki International Fair in September, and will be incorporated in the first draft of the 2021 state budget scheduled for early October.

The minister further revealed that the number of companies which have applied for the Deposit To Be Returned state loan scheme reached 80,000 in the ongoing second phase of the program. He also assured that the Greek cash buffer remains at high levels, currently amounting to 37.5 billion euros, while at the start of the pandemic it came to €36.5 billion. This is thanks to Athens drawing resources at a low cost of borrowing, Staikouras explained. He added there are no bailout demands attached to the European Union funds to come.

Meanwhile, the post-bailout monitoring of Greece’s progress is also proceeding, as creditors prepare for the seventh enhanced surveillance report, even before Athens collected the €748 million from the sixth assessment.

The creditors’ representatives will not be traveling to Athens, but conference calls with staff-level officials will begin on July 6, followed by negotiations with the mission chiefs a couple of weeks later. The main issues are once again the protection of the main residence of over-indebted borrowers, particularly the new bankruptcy law and the protection of those hurt by the coronavirus pandemic, as well as delays in the payment of the state’s arrears. Both – and especially the former – are thorny, but should not create problems as this assessment is not linked to the disbursement of any eurozone central banks’ earnings from holding Greek bonds (SMPs and ANFAs). Of course, this does not mean that a positive report, due on September 20, is not important.

Interest should peak in the following assessment, in October and November, when Athens and its creditors will have all the data on the recession, the fiscal impact of the coronavirus and the benefits from the EU Recovery Fund.

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