ECONOMY

Gov’t is mulling array of measures to prop up budget

The government’s intensive efforts to tidy up public finances seem to be having little effect on the revenue side, and Deputy Finance Minister Adam Regouzas is looking for new sources of revenue to prop up the budget. Recent measures, one for the granting of tax amnesty to firms and the self-employed for fiscal years 1998 to 2002 for one-off sums, and for the repatriation of capital under favorable tax terms, have yielded little. The January revenue figures were disappointing, up only 2.34 percent against a budget target of 8.5 percent. Tax revenues were up 3.49 percent while customs revenue actually dropped 1.92 percent, year-on-year. It appears that firms and the self-employed are unable to cough up more money after repeated such measures in the last five years. However, the ministry is now sending inspection notes to those who have refused to take up the offer. The capital repatriation measure has so far attracted only 115.8 million euros (December figures), against 20 billion which the ministry expected and which would have yielded about 600 million euros in tax. The additional measures under consideration include a relaunching of the instant lottery, an increase in the tax on tobacco, a clampdown on tax evasion in petroleum products and the settlement of overdue real-estate taxes. Concerning the instant lottery, the ministry has not decided whether to issue a tender or assign the scheme to the State Lottery Directorate (SLD). The SLD solution, favored by the big gaming bureau chains, may be enticing to the ministry on account of the large proceeds it promises for state coffers, but it requires know-how, advanced technology and the hiring of about 100 specialized personnel. The battle plan to cut tax evasion in petroleum products includes the installation of special equipment and microchips on pumps that will record all relevant data. The sources said that the lowest price of cigarettes will go up to 1.40-1.50 euros per pack, while the highest will be set at about 3 euros. The ministry will impose a specific tax sum, which is also designed to dampen the price war among cigarette manufacturers. Finally, a draft bill on capital taxation, to be tabled next month, is likely to include a provision for the approximately 1 million outstanding property tax cases that remain unsettled due to the inability of local tax departments to conduct inspections. The provision will offer lower tax settlements to those who have not settled over the past 10 years, believing that the value of their property was overestimated by the tax office.