ECONOMY

New tax levies on companies, fuel, tobacco, alcohol

The first wave of taxes from the new government aimed at bolstering revenues will include a rise in the special consumption tax on fuel, alcohol and tobacco, as well as the imposition of an extraordinary levy on major profitable enterprises. The package is set to be submitted by the government’s economy ministers in the next few days, with consumption tax set to rise from the start of next year so that the state coffers can gain about 1 billion euros more than they did this year. A recent study by the Institute for Economic and Industrial Research (IOBE) suggested that a 10 percent hike in the final price of gasoline could bring the state an additional 800 million euros, while the same rise in cigarette prices will fetch some 350 million euros. The bill to be tabled will not include any changes in the income tax brackets and the tax system in general. Those changes will likely be included in a new bill scheduled for February or March 2010. Government officials stress that the levy on enterprises is a nonpermanent measure that is essential until state efforts to beat tax evasion and collect any money owed to it bear fruit. All tax exemptions for enterprises will also be revised, aimed at cutting them down. Forthcoming changes in property taxation have worried owners, who are rushing to transfer properties to their children. The government’s intention to abolish the single property tax and reintroduce the large property holding tax (FMAP) and levies for parental concession and inheritance has forced many taxpayers to proceed immediately with real estate transfers so as to avoid the taxes on them. According to reports, most of the transactions taking place at present concern parents leaving property with considerable value to their children.