NEWS

Tax debts to be slashed

The government yesterday presented legislation aimed at settling hundreds of thousands of outstanding tax cases from 1998-2002 in the hope of raising revenues of 1.6 billion euros over 2004-2005. This will apply to some 800,000 businesses and self-employed professionals with gross incomes of up to 8,804,000 euros. A total outstanding debt of about 11 billion euros is said to be involved. National Economy and Finance Minister Giorgos Alogoskoufis, who presented the bill to Parliament yesterday, declared that this will be the last such settlement. He said it was justified both by fiscal circumstances (deficits) and the fact that the government has promised a radical overhaul of the tax system in the fall. «We will tie up the loose ends of the past and make a new start on a blank slate,» Alogoskoufis told Kathimerini, explaining the thinking behind the consecutive settling of such issues. Outstanding tax cases will be settled through a system of estimation of incomes in each financial year. The difference between this and declared income will then be taxed at a rate of 15 percent. Taxpayers who have unaudited years will receive notes from the tax department this summer and will have to pay the relevant amounts in up to 18 installments. The minimum installment will be 1,000 euros for companies with C-class books, 500 euros for those with B-class books and 250 euros for smaller companies with order books. In all cases, the ceiling on tax to be paid is set at 1 percent of gross revenues. The settlement is most beneficial to big companies, as they will be called on to pay small amounts compared to what they would have paid had they been audited by the tax department. On the other hand, it is not especially benevolent to self-employed professionals with small incomes and companies that provide services, seeing as their taxes on net profit are calculated in a relatively high bracket. A senior Finance Ministry official said: «The settlement does not apply to self-employed professionals with small incomes but mainly to those who have huge incomes which they hid from the tax authorities.»