ECONOMY

Firms set to see fairer taxation

Economy and Finance Minister Nikos Christodoulakis is reportedly receiving new proposals for company tax reform suggesting the introduction of a scale according to profits and size of the firm. The proposal, a variation of the British system, is expected to be feasible in a relatively short time and could be ready for adoption next year. Sources said that it does away with tax differentials according to the legal status of the company, introducing a greater degree of fairness. According to sources, it will be included in an supplementary report to be submitted in about three weeks’ time by Professor Theodoros Georgakopoulos, whose committee filed an extensive document for an overhaul of the entire tax system last month. An additional report on the social impact of reform is said to be expected from an Oxford University academic. Meanwhile, the so-called Central Committee for Social Dialogue on tax reform is due to hand to Christodoulakis today the findings of special subcommittees. The committee has not prepared, as originally expected, a final overall report, which has caused disagreements. The move is seen as designed to make proposals less binding on the government. In its last session yesterday, officials said subcommittee reports propose a reduction of the highest income tax rate from 40 to 38 percent and additional cuts for those with children, as well as a tax on stock market capital gains when the conditions allow it, with a parallel abolition of the present 0.3-percent tax on transactions in shares. Special tax rate cuts are also proposed for new businesses, high added-value sectors and firms based in selected areas. The proposal also includes halving the amount of tax retained at the source, in order to ease cash flows for firms. Real estate items and sums transferred as gifts by benefactors to the State and other institutions, and sums paid to sportsmen, should continue to be exempt from tax. Finally, it is proposed that the calculation of profits of self-employed professionals be based on accounting methods alone rather than on selected criteria assumed as proof of income (so-called objective values).