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The new method of VAT payment, the layoffs in the public sector, the full computerization of the health insurance funds and the liberalization of the retail sector are just some of the measures that Greece must adopt in order for it to obtain 8.8 billion euro of the European aid by the end of the month. It includes two tranches of 2.8 billion euro and 6 billion euro agreed in December last year.

These changes, together with a whole series of other legal additions, are contained in a single bill, which is to be voted on Thursday this week. The law should come into force before 28 April, when the meeting of euro zone ministers (Euro Working Group) will take place and which will involve decision-making on the final payment of the first tranche.

By the summer, Greece must reform the management mechanism of the tax system and appoint 2,000 new specialists in different units of the tax administration in order to improve revenue collection in the treasury. The legislative changes that are to be adopted will allow the taxpayers to settle their obligations to the state (excluding VAT) in 48 instalments in order to reduce the amount of outstanding tax liabilities and contributions.

The payment of VAT is also lagging behind. 20% of taxpayers have filed tax returns. According to Naftemporiki, only 4 million instead of 5.3 million taxpayers have filed tax returns for 2012, the majority of whom are mainly freelancers and sole traders. The current law obliges taxpayers to pay 40% of the VAT due when they submit the tax return in order for them to be able to pay the remaining amount in three equal instalments.

With the change in the law, which is to be adopted this week, the government allows a down payment of only 10 euro and four instalments for the repayment of VAT. The interest rate on the instalments will be 1% and if the taxpayers fail to pay the entire amount in four months, the state will resort to confiscation of movable and immovable property.

Meanwhile, the government is trying to appease the supervisors from Europe and the International Monetary Fund. It wants to put on the table of negotiations the reduction of VAT in the tourism and catering industry, which is 23% today, and the reduction of excise duty on diesel fuel. These changes will be discussed in June, when another inspection of the supervisory Troika of the International Monetary Fund, the European Central Bank and the European Commission will take place.

The lenders have already made some concessions to Greece and extended the layoffs of public workers. Now, the goal is the dismissal of 15,000 officials by 2014. So far, 63,000 employees in 17 departments have been assessed, the goal for this year being the assessment of the performance of 275,000 people in the public administration, the interior ministry and the education system. Slightly over 700,000 people are employed in the public administration of the country in total and the ultimate goal is for their number to decrease by 150,000 by early 2016.

According to the last inspection carried out by the international lenders, the goals set in the first Memorandum of financial aid were not achieved last year. Primary budget surpluses were 508 million euro in 2012 compared to the expected 2.3 billion euro. This is largely due to the delay in the structural reforms but also to the inaccurate calculation (by the mission) of the effect of the recession on GDP.

To be continued