ECONOMY

ENFIA reduction still open

enfia-reduction-still-open

The government’s pledge for a further reduction of the Single Property Tax (ENFIA) by 8% this year could still be implemented, according to Finance Minister Christos Staikouras, provided the pandemic subsides.

Speaking on Parapolitika FM radio on Tuesday, Staikouras referred to the process of adjusting the property rates used for tax purposes (known as “objective values”) that should have been completed in 2020 but was postponed until summer 2021 as a result of the pandemic.

In the context of this adjustment, the minister said there may be hikes “where necessary” to create the fiscal space that will allow for the 8% average cut the government has promised.

He stopped short of suggesting a time frame for that. Ministry sources say they think this would be difficult to accomplish this year, viewing 2022 as more likely. The same sources believe that the fiscal space will emerge from the inclusion of an additional 3,000 areas in the system of determining objective values; although they have a quite high collective value – being by the seaside in their majority – to date the zone rates in these areas have been very low.

“This is an exercise that we are trying to implement amid many objective difficulties,” Staikouras said. ”This is a promise the country has made before,” he stated, referring to the need for the objective value adjustment. ”This can obviously lead to ENFIA adjustments and not hikes, apart from the cases and the geographical areas where there ought to be an increase. There are geographical areas in the country where there must be higher taxation of real estate assets. This means there is a possibility of finding some fiscal space to realize another ENFIA cut, as we have promised, by 8%. This also has an element of financial efficiency and social justice.”

Staikouras further stated that the exemption of rental payments for closed enterprises may be extended beyond February, but that will only be decided during the course of this month.