ECONOMY

In Brief

Special tax rates for high incomes to come under review The Finance Ministry is planning to severely cut the favorable tax rates that apply separately to a number of high-income categories, including those of foreign companies undertaking special studies and project construction, housing developers, soccer and basketball players and local government officials, sources said. According to the plan, such favorable treatment will be limited to the absolute minimum and the incomes will be subject to the general income tax rates. The rationale for the review is considered dual: First, that the present situation creates distortions in competition between similar Greek and foreign companies and, second, that it runs counter to the government’s pledge to correct tax injustices for low incomes. Turkey expected to invite bids for electricity grids this week ANKARA (Reuters) – Turkey’s privatization agency OIB is expected to invite bids this week for the sell-off of electricity distribution grids, an official told Reuters yesterday. The energy market watchdog last week approved license applications for the privatization of the 20 grids. The official said OIB planned to start the privatization process with tenders for six grids. «It is planned that adverts will be issued for a few grids at first and then for the rest,» said the same official. Applicants will need to pass technical and financial pre-qualification before participating in the bidding process. Turkey aims to liberalize its electricity market through the sale of distribution grids and switch to a system of regional tariffs. The tenders have been delayed since March 2005 due to slow progress in preparing the appropriate legal infrastructure. KEO Cypriot Church-affiliated winery and brewery KEO Plc recorded a 3.2 million Cyprus pound (5.5-million-euro) pretax loss in the first half of 2006 after a restructuring involving redundancies earlier this year. The group, which posted an 80,000-pound pretax profit in the first half of 2005, said H1 turnover reached 15.6 million pounds after sales rose in Cyprus but fell in overseas markets to 817,000 pounds from 1.4 million. KEO, which produces the domestically popular Keo beer brand, has operations that are highly seasonal, with the bulk of its sales made in the summer months. It made 120 staffers redundant this year in a restructuring which cost 3.36 million pounds. Operating profits in H1 eased to 621,000 pounds from 674,000 pounds last year. (Reuters) Universal Bank Cypriot bank Universal posted a pretax profit of 531,510 Cypriot pounds (920,000 euros) in the first half of 2006, rebounding from losses last year on debt recoveries and increased income on credit-related services, it said. Universal said its profits before provisions reached 1.15 million pounds compared to 128,498 pounds in the first half of 2005. Earnings per share were 3.5 cents. The bank is a takeover target for Greek insurers Aspis Pronia and its affiliate Commercial Value AAE who have offered 0.90 pounds for each Universal Bank share, which, based on the 15.13 million shares in issue, values Universal at 13.6 million pounds. Universal Bank’s holding company, Universal Life Insurance, has rejected the offer, saying it wishes to maintain a majority stake in the bank. However, it wants a strategic partner willing to reinforce the bank’s capital. (Reuters) Producer prices Greek producer price inflation was steady at a 7.2 percent annual pace in July, unchanged from the previous month, data released by the country’s statistics service showed yesterday. (Reuters)