ECONOMY

Tax measures may force Greek companies to flee

The SYRIZA-led government is seeking to pass the burden of the fiscal gap on to the country’s enterprises by increasing already sky-high corporate taxes.

The government’s idea to impose an extraordinary levy on 2014 earnings will place Greek corporate tax rates among the highest in the world this year, on a par with Zambia and Sudan, as they will represent 29 percent of corporate gains.

There are only four countries in Europe where corporate earnings are taxed at a rate of more than 29 percent, while there are 36 countries around the world (from a total of 137 with available data) that have an equal or higher corporate tax rate.

The hike in value-added tax, if implemented, will come as another major blow to Greek businesses. Regardless of what the final package of increases is, with the Greek side saying they will fetch 1.4 billion euros and the creditors seeking 1.8 billion, this amount will be deducted from active demand in the market. The government is also proposing a more adverse tax system for corporate officials, which would make them more expensive for enterprises.

All these measures will make it more attractive for businesses to relocate to another country, in order to avoid the additional costs of staying in Greece.

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