ECONOMY

Industrialists, merchants want bolder tax reforms

Reactions from industrialists and merchants toward the government’s third package of tax reform proposals unveiled on Tuesday appeared to be mixed, with some lauding the recommendations, while others decried the lack of boldness. The tax reforms, which are due to come into force next year, are targeted principally at wage earners, pensioners and small businesses. Raising the tax-free threshold for wage earners, increasing tax exemptions for certain expenses and boosting corporate tax incentives are set to cost the State a hefty 1.4 billion euros, equivalent to 1 percent of the country’s gross domestic product. The tax measures are a step in the right direction, the head of the Federation of Greek Industries (SEV) said yesterday, although he lamented the time lag before businesses could enjoy the tax benefits. Odysseas Kyriakopoulos said companies would only reap the benefits of the tax reforms in 2004 as the proposals take effect next year. The Athens Chamber of Commerce and Industry (EVEA) was more blunt with its criticism of the tax proposals. Drakoulis Fountoukakos, president of EVEA, said more should have been done to help businesses improve their competitiveness. Noting that the government had failed to reduce the top corporate tax bracket, he said the tax reforms did not show boldness. He said measures targeting companies appeared to focus more on simplifying procedures rather than lightening the tax burden on the sector. Fountoukakos, however, praised the government’s decision to let businesses deduct bad debts from their revenues in cases where a court has ruled on the status of the liability. Nevertheless, this by itself was not sufficient. The government has said it aims to erase inequities, reduce the burden on lower-income groups, curb tax evasion and introduce a more transparent and simpler tax system with its tax reforms. The current system, characterized by its complexity and loopholes, has in part contributed to a flourishing black economy in Greece.