ECONOMY

Valavani offers debt penalty write-off

State debtors will get a chance to pay their expired debts by the end of the month without incurring any fines or penalties, Alternate Finance Minister Nadia Valavani announced on Wednesday, as the government resorts to emergency measures to boost its flagging revenues. However Valavani’s statements appeared to contradict those of Minister Yanis Varoufakis on a number of key issues.

Depending on the amount paid in a lump sum by March 31, debtors will be able to have up to 100 percent of their fines and penalties written off, Valavani announced.

Also, in contrast to statements by Valavani herself last month, the 100-installment payment scheme for debts to the state will not include the incentive of a haircut of up to 50 percent on the debts, according to the version that will likely be put up for public consultation this weekend before being submitted to Monday’s Eurogroup meeting. The haircut was withdrawn following reactions by officials and tax experts among others, said Valavani.

This is not the only backtracking by the ministry: Valavani made a number of statements yesterday that run counter to what Varoufakis had said in recent days on property taxation, real estate objective values (used for tax purposes) and the tax-free threshold for incomes.

Valavani said the existing ENFIA property tax will immediately be replaced by a new one, but its exemption limit will not be at 500,000 euros. She told Mega TV on Wednesday it will be considerably lower, given also the prospect of the drop in objective values that will take place by end-June.

Regarding the tax-free threshold for incomes, Valavani announced that its return to 12,000 euros per year will be examined in the second half of the year and will concern 2015 incomes. She was also adamant that there is no prospect of an increase in value-added tax (VAT) rates. “We are not processing any VAT draft laws,” she said, also refuting any tax hikes for tobacco and alcoholic drinks.

Valavani also expressed reservations regarding the General Secretariat of Public Revenues’ functional efficiency as the executive arm of the ministry, adding that its areas of responsibility may be reviewed.