Inheritance tax cut seen soon
The abolition of the inheritance tax and the waiving of tax for first house buyers, announced by Prime Minister Costas Karamanlis on the weekend, will be pushed through Parliament right after Sunday’s elections, Economy Minister Giorgos Alogoskoufis said yesterday. «The measure will be implemented immediately. There are already some tax exemptions for inheritances, and these will be retained,» he said in an interview on three financial Internet sites. Karamanlis announced that the inheritance tax would be replaced by a one-off 1 percent levy. Alogoskoufis said this levy would not be imposed on properties already exempted from tax, no matter what the value of the inheritance. He added only that taxes and rates levied by local authorities would remain for first house buyers. Alogoskoufis dismissed charges that the measures smacked of pork-barreling logic in view of the elections. No ‘handout’ «These are not last-minute handouts. It is a well-studied program, part of the third phase of tax reform, which is logical for the prime minister to announce before the elections,» he said. Earlier, the Economy and Finance Ministry had denied suggestions by main opposition PASOK leader George Papandreou that the government planned to abolish existing tax exemptions on inheritance, which would hit the economically weaker strata. «During the days of the previous government, of which Mr Papandreou was a member, the inheritance tax for enterprises was minimized, which favored only those with higher incomes and resulted in the transfer of huge properties,» said the statement. «Such wrongs are now being corrected. The government is steadily oriented toward relief measures for the low and middle incomes,» it added. Alogoskoufis told the same interview that in the new year the government would start the phased abolition of the stock-market transaction tax. Regarding the further privatization of large utilities, the government would consider selling a further tranche of OTE telecom to institutional investors if no strategic investor was found. By contrast, he said the main priority for the Public Power Corporation (PPC) was its restructuring and financial consolidation, not its privatization. Regarding the Postal Savings Bank (TT), which was floated on the Athens bourse earlier this year, Alogoskoufis said the government would not favor its merger with another Greek financial institution. «This would not promote competition and adulterate TT’s role as the bank of small depositors and investors,» he said. Alogoskoufis said the government plans to retain majority control of ATEbank. «ATEbank plays a special role in the farm sector, which we must safeguard. We could trim the government’s share down to 51 percent from the much higher share it is today,» he said. Finally, Alogoskoufis said the economic impact of the recent devastating forest fires would not be so great as to create a fiscal problem in the budget.
