ECONOMY

Tax and levy freeze extended

tax-and-levy-freeze-extended

Tax and social security contribution payments will be suspended until the end of March 2021 for individuals and businesses hit hard by the coronavirus pandemic, Finance Minister Christos Staikouras announced on Wednesday.

After March, taxpayers will be able to pay outstanding taxes in 12 interest-free installments or 24 installments with 2.5% interest, Staikouras added in a TV interview.

Currently, payments of taxes and levies are suspended until the end of September and, until a few days ago, the minister had suggested the suspension would be extended to the end of the year, with the exception of seasonal businesses, which were to benefit from the suspension for an additional four months, until the end of April.

The government finally decided that all current beneficiaries would get an extension to end-March. This was likely the result of new estimates which showed weaker-than-expected revenue in the coming months.

On rents, now reduced 40% by decree to businesses involved in catering, tourism, transport, sports and cultural activities, Staikouras said there will be an extension of the mandatory reduction for some businesses and incentives for property owners to voluntarily reduce rents in agreement with the businesses. Property owners clearly prefer the second option.

“We are considering several options, probably a combination… We do not want mandatory rent reduction to be extended for too long,” the finance minister said. He also promised to pay back pension arrears owed to over a million pensioners “as soon as possible” and added that the reduction of or exoneration from the pre-paid 2020 tax will be extended to businesses whose turnover was significantly hit during August. This program alone will exceed €1 billion. Contract suspensions will also be extended.

As for the 2021 budget, Staikouras said it will be drafted on the basis of the suspension of the European Union’s fiscal targets. Greece will not be obliged to plan for a 3.5% primary surplus in 2021. “We'll see about 2022,” he said.