NEWS

Investors offered low taxes for 10 yrs

The government yesterday presented the outline of a new investment law that goes much further than previous legislation in providing incentives. Economy and Finance Minister Nikos Christodoulakis announced that companies, domestic or foreign, which implement major investment projects, would sign a contract with the State ensuring special low taxes and no other interference by tax authorities for a period of 10 years. This type of incentive has been applied, notably, by Ireland, which has enjoyed over a decade of very rapid economic growth precisely because it attracted foreign investors. This represents a major change for the government, which, in the past, through statements by Christodoulakis and Prime Minister Costas Simitis, had disparaged the notion that Greece could ever become a low-tax company magnet like Ireland. «This will not happen,» Simitis had said. However, second thoughts about Greece’s ability to sustain for long its current high level of economic growth, at around 4 percent annually, must have prevailed. If this is so, it may signal the beginning of further changes aimed at boosting the economy’s competitiveness. The actual tax to be imposed on investors has not been determined as yet, but ministry sources were putting taxable profits at 7 percent of the amount invested. The law, which the government wants to pass through Parliament by September, would also allow companies to form tax-free reserves in order to invest or renew equipment.