Coalition ally seeks tax amnesty to get cash back to banks

The junior partner in Greece’s ruling coalition plans to propose a tax amnesty on undeclared income deposited in Greek banks in a bid to reverse the rising tide of funds fleeing the country, the party’s leader said in an interview published on Sunday.

Panos Kammenos, the head of the right-wing Independent Greeks party in Prime Minister Alexis Tsipras’s anti-bailout government, said he would propose legislation cutting the tax on such income to 15 percent from 42 percent with an exemption on further taxes for the next four years.

“As far as banks and their liquidity is concerned, I believe the climate will improve soon,” Kammenos told the weekly Real News newspaper.

“A measure that we will propose to the government is the possibility of depositing cash whose origin cannot be warranted at banks subject to a 15 percent tax and with depositors being exempted for the next four years.”

Greek banks have been hammered in recent weeks as the prospect of a stand-off with the country’s international creditors prompted savers to withdraw cash. Deposits fell in December for the third straight month and bankers expect the trend to have accelerated in January.