The government Monday submitted to Parliament a multi-bill containing a first set of prior actions that Greece has pledged to creditors, including phasing out early retirement, introducing stricter penalties for tax evasion and raising taxes for Greeks who rent out their properties.
The bill is to be put up for debate before being voted on, likely on Friday night when Prime Minister Alexis Tsipras is expected to have returned to Athens from a European Union leaders’ summit on migration.
MPs of Tsipras’s leftist party SYRIZA met Monday to discuss the bill, which is expected to provoke vehement debate in Parliament but is almost certain to pass into law. Only one coalition MP, Nikos Nikolopoulos of the right-wing Independent Greeks, indicated that he would break ranks with the government.
The government must legislate the reforms to unlock the first 2-billion-euro tranche of rescue loans from Greece’s third bailout.
The bill foresees several changes that Greece has promised to creditors as regards civil servants and pensions, including phasing out early retirements by 2022 so that all Greeks work until the age of 67. Those who qualified for a pension before August 18 of this year will be exempt from the changes. Meanwhile, those who have already retired but have yet to reach the age of 67 are to see their pension payments cut by 10 percent. A comprehensive overhaul of Greece’s pension system is expected to be presented by Greek authorities to creditors next month.
The draft legislation to be debated by Greek MPs this week also raises the tax rate on rental income from 11 to 15 percent for annual incomes below 12,000 euros and from 33 to 35 percent for annual incomes above 12,000 euros. The new rates are to apply retroactively from January 1, 2015. Property owners will also be obliged to pay tax on rental income that they have not collected. The Hellenic Property Federation reacted angrily to the provisions, calling them “brutal measures.”
Responding to pressure from lenders to curb tax evasion, the bill outlines tougher penalties for those not paying their dues. Offenders face up to two years in jail.
The bill also foresees the deregulation of the gas market and tighter criteria for the protection of homeowners struggling with repayments.