Stournaras seeks tax cuts but says drop in revenues misleading as targets being met

Greece will discuss with the troika the possibility of reducing some taxes when inspectors return in June, according to Finance Minister Yannis Stournaras, who also told Sunday’s Kathimerini that the coalition will introduce changes in the civil service that will prevent promotions being strictly tied to time served.

“We understand that a lot of families have reached their limits,” said Stournaras in an interview. “This is why we negotiated hard for the emergency property tax to be reduced by 15 percent despite the troika’s objections.

“During their next visit, we will examine reducing other levies, such as value-added tax for food service. Also, we will take another look at the special consumption tax for fuel.”

The Finance Ministry said on Thursday that heating oil consumption fell 68.7 percent from October 2012 to February 2013 compared with a year earlier following a hefty tax rise. Nevertheless, revenues rose from 141.5 million euros in winter 2011-12 to 244 million in 2012-13.

Stournaras played down concerns that falling revenues in other areas are a sign that Greece will have difficulty meeting its targets.

“There is a myth that revenues are collapsing,” he said. “The data that I have seen show that while we are off target in some areas, such as consumption taxes, we are making up for it by beating targets elsewhere.”

Stournaras said net revenues for the first quarter of 2013 were just above the troika’s target.

“The mistake that many people make is to compare this year’s revenues with last year’s,” he said. “We knew that revenues would be lower this year because of the continuing recession and that is reflected in the targets we have agreed with the troika. The only comparison that should be made is against the targets.”

The finance minister also said the 15,000 civil service sackings agreed with Greece’s lenders were part of a wider plan to improve the efficiency of the public sector. He said that younger personnel would play a part in achieving this goal.

“The improvement of the civil service does not consist of continual dismissals,” he said.

“But it is an ongoing process, which can happen through regular training of our personnel and the promotion of younger and abler personnel to high-ranking positions. We have agreed to reduce the amount of time served that is needed before a promotion can take place.”

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