Galery

1

Over 5 million Greek citizens, or two thirds of the nation’s 8.24 million taxpayers, have declared annual income of less than €12,000 in 2009 according to the tax forms already submitted. Workers declaring income of less than €30,000 represent some 85% of the workforce, while those with €200,000 or more are less than 3000. The data was circulated to journalists by the Finance Minister – Georgios Papakonstantinou – in a meeting during which he presented an overhaul in the Greek tax system. Commenting on the bleak situation of the Greek economy, the Minister underlined the fact that total income from taxation – direct and indirect – amounts to only 20%, compared to the 25% average in the Euro zone. Papakonstantinou did not rule out further increases in duties in 2010 as a measure to counter the crisis.

According to Papakonstantinou, Greece’s current tax system has significantly contributed to non-captured VAT and tax avoidance, amounting to losses of €6,6 million in 2008. To highlight the need for reform, he used private physicians, lawyers and architects as an example of the failure of the taxation arrangement, which does not allow the government to directly monitor their income. As a result, 73 % of the practitioners of these and other control-free professions have submitted individual income tax filings declaring income below the minimum tax cut-off point in 2009. Faced with two downgrades in a week, the new government’s tax reforms aim at improving efficiency in the tax system and boost budget revenues, as well as tackle the soaring corruption and red tape.

Together with the suggested tax reform, the Finance Minister officially revealed the start of a public dialogue, aiming to capture the public opinion on the topic of taxation. It will also help the government, other institutions, and Greek citizens discuss the nation’s problems and find popular and effective solutions. The dialogue will be held at three levels: level one “civil initiative”, will provide the www.opengov.gr website to  the population as a means of releasing information and answering questions related to the new taxation system; at the second level, members of different institutions will be placed in project groups, coordinated by the Ministry of Finance, and will plan the future enactment of the new tax bill; at the third level, suggestions and the final bill will be discussed in parliament, prior to the finalization of the process, and the enactment of the reforms.