Debt repayment set for boost

Debt repayment set for boost

The Finance Ministry is looking at ways of making the 120-installment scheme for settling debts in taxes and social security contributions more attractive, with sources suggesting that a foreign expert may be brought in to help lure more debtors and bolster state coffers.

Talks with the country’s creditors regarding the tax bill that is to be tabled in Parliament in the next few days are ongoing, meanwhile, with sources saying that the changes the new government plans to introduce will be broken down into three bills. The first will introduce reductions on the taxes of households and corporations, and on the Single Property Tax (ENFIA), as well as the changes to the debt repayment scheme. The second draft law will concern changes to tax procedures and will be submitted along with the 2020 budget, while the third will pertain to online transactions and value-added tax. That will be scheduled for ratification next year.

The matter that is currently of concern creditors, however, is the 120-tranche scheme, which they see leaving a budget gap worth 0.6 percent of gross domestic product. It was the object of talks between creditors’ representatives this week with Finance Ministry officials, including Minister Christos Staikouras.

The government intends to reduce the minimum monthly tranche from 30 to 20 euros for those owing up to 3,000 euros, which will likely bring more debtors into the program, as will a reduction of the interest rate of 5 percent to just 3 percent.

Ministry plans further include the creation of a more favorable framework so as to incorporate as many enterprises as possible in the program. Government sources say there will be an increase in the maximum number of installments from 24 to 120 for companies as well.

The latest data show that the scheme, as set up by the previous government, has not been faring well, vindicating the concerns that had been voiced by Greece’s creditors. So far some 189,500 applications have been approved for the settlement of debts adding up to 1.6 billion euros, while takings are close to just 130 million euros.

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