Property tax here to stay, says PM

Prime Minister Lucas Papademos pledged on Friday that his interim government would ensure that the emergency property tax is applied fairly but revealed for the first time publicly that the levy would remain in place next year as well.

Speaking in Parliament, Papademos said that the process of applying the tax, levied through electricity bills, would be changed so that vulnerable social groups would not be charged.

?One of my main intentions when I took over as prime minister was to look for ways so that the application of this measure would not burden those most in need,? said Papademos. ?I did not want to announce these intentions. I would like the government to speak through its actions rather than its promises.?

According to a Finance Ministry circular, those who are more than 80 percent disabled will be taxed at a lower rate. Also, the Public Power Corporation (PPC) will not cut the power supply of property owners who do not pay the levy in cases where the taxpayers have serious health problems. The same will apply to those who do not have any form of income or other assets apart from the property in question.

Responding to a question from Communist Party leader Aleka Papariga, Papademos revealed that the property tax, which was introduced to make up for a shortfall of some 2 billion euros in revenues, would not be withdrawn at the end of the year but that efforts were being made to find a fairer way of levying it.

?It is not possible for this measure to be withdrawn,? he said. ?It was deemed absolutely necessary to ensure that public finances did not deviate from the targets that have been set.? The prime minister suggested that next year the tax, which ranges between 0.50 and 20 euros per square meter, would not be levied through electricity bills and would not be demanded as a lump sum but in 12 months installments.

The Council of State, Greece?s highest administrative court, on Friday began hearing a series of appeals by groups and individuals claiming that the property tax is unconstitutional.

Papademos was in Parliament to oversee the launch of a debate on the 2012 budget which is to be voted on Tuesday. It was decided that a draft bill overhauling the tax code would be submitted to Parliament later this month. Legislation foreseeing mergers of state companies, the opening of closed professions and an increase to contributions to auxiliary pension funds are also to be submitted in Parliament in coming weeks.

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