ECONOMY

Tax reform barrage finalized

The Finance Ministry has made public a final draft plan of tax reforms as it scrambles to boost state revenues in order to help the country get through the debt crisis. Critics say the changes «will take the country back 20 years,» harming key sectors such as construction and export industries. The barrage of tax changes, many of which will be applicable from the start of the year, once approved, include dropping favorable tax rates for certain professional groups and forcing taxpayers to qualify for a tax-free threshold by providing proof of their living expenses. «The year 2010 is a crucial one for the course of the economy,» the ministry said. The reforms, which have been finalized after three months of public debate, will be discussed at a Cabinet meeting on Tuesday and are likely to be tabled in Parliament the following day. The ministry said that stamping out tax evasion is at the top of its priority list but government officials declined to say yesterday how much they will earn from their attempts to root out undeclared income. Greece’s black economy is estimated to amount to at least a third of the official 250-billion-euro gross domestic product. The draft plan also introduces a 15 percent capital gains tax on stock market transactions, places a 10 percent levy on luxury goods such as jewelry and toughens rules that offer first-time home buyers a tax break. The Technical Chamber of Greece (TEE), which has more than 100,000 members, including engineers and architects, said changes to the way they are taxed «are taking the country back 20 years» adding that the new first-home levy will freeze the construction industry. «The measures discourage [the acquisition of a home],» TEE said. Gold and silver jewelry makers forecast the luxury tax will send prices sharply higher, saying that it will also hurt their export activities.