Gov’t dismisses tax barrage talk

The government denied yesterday that it will soon be introducing a barrage of tax hikes, saying it plans in October to announce steps that will boost the country’s competitiveness, cut spending and stamp out tax evasion. Economy and Finance Minister Yiannis Papathanassiou was responding to recent local press reports that indicated the conservative government is about to lean on taxpayers for more money after announcing the latest measures last month to boost budget revenues. «We will set the basis for a new economic model of growth that will be supported by an outward-looking view, investments and education and will rely less on consumption and borrowing,» the minister told lawmakers. In June, the Finance Ministry announced tax hikes on fuel, mobile phones, lotteries, horse betting and cars with over 2-liter engines, among others, as part of an effort to put an additional 2 billion euros into state coffers. Additional steps to cut spending and catch tax cheats were expected to save the state an extra 400 million euros. Greece’s slowing economy has resulted in a sharp drop in tax revenues, which has placed an enormous strain on state finances. «These measures will allow us to succeed in reaching our country’s goals, not only in 2009 but also in 2010,» added Papathanassiou, who had attended a European finance ministers’ (Ecofin) meeting on Monday. The European Commission described the measures taken by Greece to lower its budget deficit to below 3 percent of gross domestic product by 2010 as «satisfactory» but still expects structural changes as part of next year’s draft budget plan. The measures likely to be announced by the ministry in the fall include reducing the allowances paid to public servants for working in hazardous conditions and opening up state-regulated professions to competition, according to senior government sources.