Tax reform shivers
Just 24 hours after the unveiling of a government-appointed committee’s proposals for a more simplified tax system, the government yesterday appeared to shrink before the danger of the political cost it might have to pay. Protagonists in the move against National Economy Minister Nikos Christodoulakis, who presented the proposals on Wednesday, were Culture Minister Evangelos Venizelos and and Education Minister Petros Efthymiou. They took the opportunity of a Cabinet meeting to criticize their colleague for what they called a premature announcement that could have a political cost for the government. Venizelos noted that bad handling of the issue had caused the news media to see the committee’s proposals as those of the government. Efthymiou said that the government had to make clear that it would present its own principles for reform. Prime Minister Costas Simitis adopted their criticism, making it clear after the meeting that the government had not adopted the committee’s proposals. These range from a reduction in the top income tax break to the abolition of several tax breaks, such as not counting interest on mortgages as taxable income. The experts’ proposals are intended to form the basis of a dialogue between the government, business and labor unions. «The government has not evaluated and of course it has not adopted these proposals, which are the proposals of an independent committee,» Simitis said. He said that his government aimed to hold a dialogue with interested groups and then «present its own proposal around the end of May.» The prime minister said that the government’s aim was to create a tax system that would lighten the burden of wage earners and pensioners, make life easier for businesses and investments, while also helping to curb tax evasion and luxury consumption. Health Minister Alekos Papadopoulos spoke out in favor of the tax reform proposals during the Cabinet meeting. But his offer to support them in public was not accepted by his colleagues. The concerted criticism by Venizelos and Efthymiou was the second such instance in two consecutive Cabinet meetings. In the first, they questioned Deputy Foreign Minister Tassos Yiannitsis’s approach to preparations for Greece’s presidency of the EU next year as too «Eurocentric.» A year ago, widespread criticism of the government’s proposals for social security reform prompted Simitis to call an early party congress to shore up support within PASOK. Now new rifts appear to be opening.
