Gov’t plans tax on foreign-based funds

The government is looking everywhere for ways to boost revenues, even if they derive from undeclared funds or other beneficial regulations such as the haircut of up to 50 percent on debts to the state. The Finance Ministry is now planning an amnesty on undeclared capital abroad, aiming to tax it – but not necessarily to repatriate it – according to Alternate Finance Minister Dimitris Mardas.

“France managed to collect 6.5 billion euros from funds based abroad. Why shouldn’t we do that too?” Mardas told Kathimerini. He has already submitted his plan for taxing foreign-based capital to minister Yanis Varoufakis.

Mardas said that the plan concerns funds based abroad which have not been declared to the Greek authorities, which in practice amounts to illegal money. According to the information he has had from ministry officials and market professionals, the amount of money based abroad is so great that even he was impressed by the estimate he was presented with.

The tax rate to be applied on those funds remains to be decided as are the details of the regulation that will apparently reach Parliament very soon. It will practically entail an amnesty with a tax rate that may range between 10 and 15 percent.

After the announcement of two arrangements (on capital amnesty and cuts on debts to the state) by government ministers, it is possible that a review of unchecked and outstanding cases from 2011-14 will be conducted given that the state coffers are emptying rapidly.

This runs counter to statements made by Minister of State for Combating Corruption Panayiotis Nikoloudis to the New York Times: “I have nothing against rich people; I am against dishonest rich people and I’m here to get them.” He went on to estimate there is 120 billion euros outside Greece, mainly in investment accounts which Greece has no access to.

Nikoloudis added in the interview that he had in his hands 3,500 audits amounting to 7 billion euros in back taxes, 2.5 billion of which he hopes will be collected by summer. An additional 22,000 cases, worth several billion euros, will soon be ready for pursuit, he said.

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