ECONOMY

Car importers call for more time

The Association of Greek Car Importers (SEAA) called on the government yesterday to extend the tax break on new car sales in a move it argues will pay for itself in increased state revenues. In April, the Economy and Finance Ministry announced a 50 percent cut in the registration tax on new cars and motorcycles in a bid to support growth and jobs in the sector, which has been hurt by consumers putting off car purchases due to the crisis. The tax cut is applicable until August 7. «SEAA proposes the extension of the measure, as it is clear that the government’s decision does not harm state revenues while helping to provide relief to the sector and maintaining job positions,» it said in a statement. According to figures presented by SEAA, which represents 3,000 businesses and more than 70,000 workers, monthly tax revenues after April’s reduction rose to 112.7 million euros, from 98.5 million euros previously. This means the government could earn an extra 170 million euros per year due to the increase in business, added SEAA. According to some sources, the government is likely to extend the tax break until the end of August but is not considering offering the break through the end of the year. Some experts, however, argue the measure has provided only short-term relief for the sector and will have no lasting positive impact on growth. In a recent report on Greece, the International Monetary Fund said, «Measures such as subsidizing car sales… do little for growth but further increase debt.» Another step SEAA has called upon the state to implement was linking car tax to each vehicle’s emission levels rather than engine size, as is done currently. The number of cars on Greek roads increases each year by some 4 to 5 percent, or between 200,000 to 250,000 vehicles, versus a growth rate of just 2 percent in the European Union as a whole. In 16 EU countries, car taxes are based on carbon dioxide emission levels, said SEAA.