Red tape stalls funds repatriation

An ambitious plan to inject up to 600 million euros into the state coffers by allowing the repatriation of capital with few questions asked is still locked in red tape, two months after the inflow was supposed to have started. At the end of July, the government passed a law offering Greeks with capital stashed away in foreign bank accounts the opportunity to transfer the funds to accounts in Greece without having to answer uncomfortable questions about whether the money had been mentioned in past income tax declarations. The only scrutiny would concern money laundering or funding of terrorist groups. Greeks taking advantage of this opening within a six-month period after publication of the law in the Government Gazette would have the sole obligation of paying a one-off 3 percent tax. With the General Accounting Office projecting an inflow of some 20 billion euros, the corresponding tax revenue would have amounted to 600 million euros. However, some 60 days into the six-month period – which started on August 4 – the law has yet to kick into action as the government has failed to issue a circular setting out the practical details of the process. A high-placed government source told Kathimerini that Finance Ministry officials are planning a meeting with representatives of the Hellenic Banks Association to settle the matter, although it is unclear when that will happen. According to the same source, the ministry is also entertaining the notion of expanding the deadline for another six months, should there be sufficient interest in the plan. In that case, however, the tax will be increased to 5 percent of the total sum repatriated. Billed by Economy and Finance Minister Giorgos Alogoskoufis as a way of boosting investment, creating new jobs and enhancing the liquidity of the banking system, the plan was modeled along the lines of a similar initiative by the Italian government in 2001. In six months, some 90 billion euros was repatriated, taxed at 2.5 percent. Two six-month extensions were granted, during which the tax was upped to 4 percent.