Transparency now

Many aspects of the new taxation bill to be tabled this week are good grounds for comment. Direct tax breaks, for example, for lower-income groups or a greater recognition of expenses that would somewhat relieve the tax burden on middle-income groups are feasible measures that, given the huge fiscal burden, provide for a more rational, and therefore a more just, distribution of taxes. In addition, providing taxation incentives for business mergers as of 2005 will undoubtedly help boost business activity and the competitiveness of Greek businesses in today’s highly competitive, globalized world. Undoubtedly a praiseworthy effort, the taxation bill’s main advantage is above all the different mentality that pervades it, quite apart from the specific measures it introduces. It entails the introduction, at long last, of conditions of absolute transparency, equality before the law and a continuity of taxation policy, so that businesses and the self-employed will be in a position to plan their activities within a stable framework that is known to them in advance. The government’s commitment to gradually reduce the tax rate on profits from the current 35 percent to 25 percent over the next three years, that is by the end of 2007, is the most spectacular indication of that mentality, since it provides a strong incentive (by reducing taxation by a third). It also permits businesses to determine their investment plans as of now and to carry them out secure in the knowledge of the taxation regulations governing their activities. The same applies to the closing of books, in a clear and automatic manner, for the self-employed and and small-business owners. This is a move that constitutes another major step in the direction of transparency. It absolves those concerned of the uncertainty of possible inspections of their books and the uncertainty around the timing of those sudden inspections. Hundreds of thousands of taxpayers will be freed from the additional fear of being blackmailed by a taxation officer. The rules are now clear and known in advance; this is the fulfillment of a longstanding demand on the part of the business world. It is the business owners who will now have to show themselves capable of exploiting this new mentality for the good of the Greek economy.