ECONOMY

Focus on investment incentives

The Crete-based Institute of Development and Entrepreneurship (INAEP) has called for a drastic cut in company tax rates, with a view to providing larger rewards to investment risks, securing parity in the taxation burden to other countries and attracting foreign investment. The measure is proposed as part of a package of incentives in the government’s planned new development law. Other incentives under recommendation are larger tax-free reserves and subsidies to commercial, transport, logistics, telecommunications and quality services firms, as well as for investment in networking, e-commerce and information technology. Further, INAEP proposes the minimization or abolition of the linking of incentives to job creation, the promotion of public projects with the participation of private financing, and the subsidization of exports. The institute also argues that such initiatives must particularly target quality farm products, including organic crops, and proposes that grants be increased to 75 percent for introduction of standardized systems of quality, environment, work health and safety, and the extension of grants to lower investment budgets (minimum 15 million euros). Deputy Economy and Finance Minister Christos Folias told a press conference yesterday the new development law will aim to meet the basic national requirement of bolstering the country’s disadvantaged regions by setting eight main targets: boosting competitiveness; attracting foreign capital; increasing employment; environmental protection; lifting of regional inequalities; introducing state-of-the-art technology and innovative business activities; expanding incentives to sectors hitherto ignored, such as commerce; and providing opportunities to small and medium-sized firms (SMEs) of the large urban centers. For SMEs in particular, which account for two-thirds of the country’s jobs, Folias said the government hopes the law will serve as their strategic ally, as they will receive additional incentives to upgrade to the necessary technologies and restructure their productive base.