Gov’t eyes economic overhaul

Gov’t eyes economic overhaul

The government is considering a series of measures to help the economy emerge from the coronavirus-incited recession, including passing a number of taxes onto local authorities and introducing a training subsidy.

Among the measures on the table of talks with the country’s creditors are the transformation of the unemployment benefit into a training benefit upon completion of six months after a worker’s layoff, a tax indemnity for at least five years as an incentive for the merger of very small enterprises, and the introduction of tax exemptions for those who choose to save money in investment-pension schemes.

Other measures being considered include the gradual abolition of the supplementary property tax so that the bulk of the capital – led by ENFIA, the Single Property Tax – is gradually passed onto local authorities, the generous slashing of non-salary costs with the abolition of the solidarity tax, and the reduction of the calculation rate for the social security contributions.

The objectives of the measures for the day after the pandemic concern the creation of fewer, stronger and more competitive business entities; rendering salaried employment cheaper in order to return unemployment to low levels – hopefully below 10% in the next four years – based on the creation of dependent labor relations; the end to owners having to pay ENFIA without feeling they get anything in return; and for the saving model of Greeks to change so that instead of investing in real estate, which incurs such a heavy taxation, they channel their savings into other products, including the long-term investment in stocks, so as to ensure an income after retirement.

Convergence has already been achieved on many of these measures among the members of the committee advising the government. Led by Nobel Laureate Christopher Pissarides, the committee has already submitted its proposals to the prime minister, augmenting the government’s plans from before the pandemic.

The idea is for many of these measures to start applying from 2021 so that the program can be completed by 2023 or 2024. Announcements are expected by the prime minister at the annual Thessaloniki International Fair in September.

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