NEWS

Premier outlines eight development strategies in his speech at the Thessaloniki International Fair

The prime minister’s speech presented a raft of development strategies aimed at achieving a «dynamic leap forward.» The full list of structural changes is as follows. 1. Radical tax reform to support increased investment and help consolidate a new taxpayer-State relationship. * The institution (within three years) of a reduced tax rate on business profits, as foreseen in our election platform, from 35 percent to 25 percent for limited and societe anonyme companies, and from 25 to 20 percent for private companies. * Implementation of a new tax scale for households, gradually reducing taxes over a period of three years. * Significant increases in the depreciation rates of all fixed assets. * A new system of modern, transparent tax inspections for freelance professionals (with gross incomes up to 150,000 euros) and small and medium-sized enterprises (with incomes up to 300,000 euros), when declared income does not exceed the limit set by the unitary profit rate. * Abolition of the Financial Crimes Squad in its present form and the formation of a new body to combat large-scale tax evasion, illegal commerce, smuggling and financial crime. 2. A new development law to serve the main goal of our economic policy, fostering small and medium-sized businesses, which spearhead development in the provinces. We will support them and employment throughout the country. For this purpose the development law: * Gives greater support to small and medium-sized businesses. * Abolishes the distinction between new and old businesses so that all receive subsidies. * Increases capital subsidies and tax incentives. * Supports capital input investments. To include enterprises in the new law, there is a quota system based on the following criteria: – Boosting employment. – Promoting regional convergence. – Export orientation. – Technological upgrading and innovation. – Creation of new products and products with high added value. 3. New institutional framework for permits and operation of businesses to limit red tape, drastically reducing the time needed to set up a business and removing any margin for corruption. Our proposal for manufacturing businesses has already been presented for public debate and our proposal for commercial businesses will follow. Our ultimate goal is to codify disparate laws and create «one-stop» services. We are also promoting: * A new framework for the foundation and operation of department stores. * Measures to support electronic commerce. * Steps to combat illegal commerce and imports. 4. Legislation for co-funded and self-funded projects. The procedures have already begun and new co-funded pilot projects have been announced. 5. Market reform, especially of the energy market (electricity and natural gas) which will attract large new investments and create new jobs. We put particular emphasis on boosting the production of energy from renewable sources and are setting up a healthy framework for the exploitation of mineral resources. 6. Expediting the absorption, rational use and transparent management of Third Community Support framework funds. In six months, we have increased the absorption rate of EU funds from 23 percent to 28 percent. * We have upgraded the system of managing and monitoring programs so as to strengthen competition and transparency. * We have also reviewed operational programs so as to move available EU finds purposefully to boost the provinces, support small and medium-sized businesses and bolster employment. Existing funds exceed 19 billion euros and represent a significant lever in Greece’s progress to development. 7. Bolstering an outward-looking economy. We emphasize economic diplomacy. We are using the post-Olympic era and promoting the comparative advantages of Greece, combined with the new investor-friendly environment we are creating. At the same time, we offer development incentives to encourage businesses’ export outlook and we directly meet the State’s obligations to export enterprises. We have already begun the gradual return of accumulated VAT debts (about 60 millions euros), to export companies. We have also established a new procedure by which 90 percent of the tax is returned at once and the rest after auditing. 8. National Regional Development Strategy. Our basic focus for New Democracy’s first four-year term of office is on the periphery. We give first priority to policies that concern the countryside, and mountain and island Greece. The basic elements in this policy are: * An aggressive new rural policy to support the agricultural population and Greek products on the local and international market. * Upgrading quality and expanding the tourism industry throughout Greece. * Support for shipping, which has a special role in economic development. * The creation of new national and provincial networks and the upgrade of existing ones. * The creation of projects to revitalize the provinces.