VAT reduction on the cards
Wednesday will see the start of discussions on the new tax system at the Finance Ministry, with the reduction of value-added tax being a real possibility as the government is seeking ways to bolster growth.
The ministry will examine the reduction of the VAT rate of the top bracket of goods and services from 23 percent to 20 percent, and of the 13 percent rate to 10 percent. One of the government partners, New Democracy, has insisted on a reduction to the former rate of 19 percent, the latter to 9 percent of the low rate of 6.5 percent to 5 percent.
This is just one of the many issues that the ministry will have to deal with in the drafting of the bill for the new system, with the merging of property taxes, the adjustment of income tax for taxpayers and enterprises, the taxation of plots of land and the restructuring of the tax collection mechanism also on the agenda.
?We have to answer some 15-20 major questions,? said Finance Minister Evangelos Venizelos recently.
Regarding VAT, the government intends to abolish the favorable rates applied to goods and services on remote islands, where VAT is about 30 percent less than in the rest of the country.
