Development law offers more investment incentives

The proposed development bill expected to go into effect next year will offer tax credits to existing businesses, give a boost to new companies’ capital base and set out a simpler framework clear of red tape, Economy and Finance Minister Nikos Christodoulakis said yesterday. He said the new draft bill, which will replace the current four-year-old legislation, takes into account Greece’s current robust economic performance, lower financing costs and minimal currency volatility resulting from eurozone membership. Against this favorable outlook, state incentives to the private sector to help companies carry out their investments should be viewed as an invaluable supplementary tool, the minister noted, especially when projects focus on regional growth, improve the quality of life and upgrade personnel skills. The proposed bill will target principally the manufacturing and tourism sectors, the former still in its infancy and the latter an important source of tourism receipts. It will offer tax breaks to existing companies planning to upgrade and expand their operations. New companies focusing on technology, tourism infrastructure and hotels aiming to modernize their facilities will be able to apply for subsidies, with the size of the grant tied to the number of jobs created. The legislation will also set out simpler and clearer evaluation and monitoring procedures, with approval for each project to be issued within three months of its submission. Underlining the disparate levels of development nationwide, the bill divides the country into three zones; the first encompassing Attica and Thessaloniki, the second embracing areas with low employment rates or a declining active population, and the third covering Thrace, border regions and islands. Under the current development law, 251 billion drachmas (740 million euros) in subsidies were disbursed to companies, investment projects worth 746 billion drachmas (2.2 billion euros) were carried out and 14,680 jobs created. The government plans to launch a social dialogue on the draft bill next week. Separately, the minister said the response to the online tax service,TaxisNet, has been enormously successful, with some 215,000 individuals to date submitting their income tax declarations via the Internet. «The income tax office has set a target of 300,000 online applications for this year which should be achieved in the next 10 days,» he said. Encouraged by the state’s offer of a 2.5 percent income tax discount for online tax submissions, Greeks have rushed to take advantage of the new service. The online facility has been equally popular among businesses, with 240,000 companies submitting their value-added taxes online, up 287 percent from March last year. Bowing to demands, Christodoulakis said companies with B category accounting books will not be obliged anymore to submit their VAT declarations online.

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