ECONOMY

Tax-break law to be revoked

The government plans to abolish a law that had offered companies tax breaks, which the European Commission has condemned as illegal, the finance minister said yesterday. «We will enact legislation to do away with this law; this law has already been abolished through a ministerial decision,» Giorgos Alogoskoufis told reporters. Last week, the Commission told Athens to suspend illegal state aid granted in the form of tax breaks under a law enacted by the previous Socialist government. The legislation had allowed companies to deduct up to 35 percent of profits in 2003 and 2004 from their tax base for projects involving the production of textile materials, energy and specific tourism undertakings, among others. The companies had to use their tax-exempt income to finance expenses such as construction, expansion and modernization of plants and buildings and purchase of new equipment. The Commission said it may ask the government to recover the money from the firms if an investigation showed the breaks were incompatible with EU competition rules. Alogoskoufis said this was not fair to companies that had benefited from the law that was in force (at the time). (Reuters)