New incentive for investments considered
In a bid to bolster growth and cover the ground lost this year as soon as possible, the government is considering a second reduction to the corporate income tax deposit in 2021, as a bonus spurring enterprises to carry out investments next year.
A generous reduction of the tax deposit paid by corporations every year is among the first tax breaks the government is expected to implement, according to comments by Prime Minister Kyriakos Mitsotakis on May 20. Finance Minister Christos Staikouras went on to clarify that the reduction will concern companies who saw their turnover shrink above a certain level in March-May. That level is set to be determined next month.
A senior Finance Ministry source told Kathimerini that out of the pool of enterprises standing to benefit this year from the reduction of the tax deposit for 2021, those that carry out investments may also secure a reduced deposit next year toward their tax bill for 2022.
The tax deposit reduction was initially seen as being financed through the returns from eurozone central banks’ Greek bond holdings (SMPs and ANFAs) if an agreement was reached on changing their use in favor of investments. The proposal, however, has not been approved by Brussels and will be discussed again in the fall. Staikouras, Kathimerini understands, believes that even if the scheme is approved, the eurozone may not agree to these resources being used for a tax deposit reduction. Instead, he speaks of their use for public and private investments.
Given, however, that it is impossible to assess the fiscal space that will be available yet, the government plan for tax breaks is still in the early stages of preparation. Ministry sources say that more detailed planning should be possible in the fall, when the extent of the economic recession and the prospects of the utilization of the European emergency resources becomes much clearer.
With Greece’s share from the “Next Generation EU” recovery package coming to €22.5 billion, this is about €6 billion a year, sources say.