ECONOMY

Gov’t finally answers SEV call

gov-t-finally-answers-sev-call

The Economy Ministry finally appears to be heeding the call by Greek industrialists for the provision of more incentives for strategic investments, as it intends to submit a new bill to that effect in Parliament next month.

The incentives to be offered will be related to tax exemptions with regard to the excess depreciation of investment projects, while the ministry is also examining the extension of the deadline for project depreciations from five to 10 years.

This development is expected to offer a boost to enterprises so that more investments are made in Greece, as this is a sector that has suffered more than most over the last few years, and so that local companies become more competitive compared to their foreign rivals.

The Hellenic Federation of Enterprises (SEV) says that would be absolutely necessary due to the investment deficit Greece is suffering from and the considerable competition it is facing from the rest of the countries in the broader region in terms of attracting investors.

In this context, SEV notes in a special report, Greece ought to change the way it taxes depreciations, so as to converge with the incentives provided by other European countries.

SEV illustrates in its report that Greece has ended up the only country still providing for the very short period of just five years during which the losses from an investment can be offset by future profits, and limiting the possible adjustment of tax depreciations to the lifespan of the fixed capital investment so strictly.

The combination of that framework’s features is particularly harmful for enterprises that systematically invest in innovative equipment or in fixed capital with a long period of return. Consequently, this undermines the increase of investment in industry and manufacturing, which account for 9 percent of gross domestic product; the national target the government has set, following pressure from SEV and other industrial associations, is for that sector’s share to climb to 12 percent of GDP, while it exceeds 15 percent in the rest of the European Union.