Determined to appease international moneylenders, and to secure release of an EUR8bn tranche of its EUR110bn bailout agreement, the Greek government recently announced plans to introduce a new property tax in Greece, for immediate application. The government also revealed plans to submit its 2012 budget bill to parliament, ahead of schedule, in October.
Eager to show its determination to meet its fiscal targets, and to allay fears that the country is on the brink of a default, the government united on plans for a new property tax during an extraordinary cabinet meeting in Thessaloniki.
Dismissing claims that Greece could leave the euro zone, Prime Minister Papandreou insisted that his government would take whatever measures necessary to avert bankruptcy.
Defending the government's decision, Greek Finance Minister Evangelos Venizelos underscored that the proposed property tax, which would be imposed in Greece over the course of the next two years, is the only measure that can be enforced immediately and produce results quickly, and which can be applied universally.
Expected to generate in the region of EUR2bn for the state and to enable the government to meet its 2011 budget deficit target, the levy will be collected through electricity bills instead of via the usual tax collection mechanism, Venizelos explained. The tax will range from EUR0.50 to EUR10 per square metre, depending on the location of the property and will be imposed over a two-year period.
Commenting on the latest announcement, EU Economic and Monetary Affairs Commissioner Olli Rehn stated that: “I welcome the expressed commitment by the Greek government to fully meet the agreed fiscal targets this year and next, and to take the necessary consolidation measures to achieve these objectives. Today's decisions, including the levy on real estate, will go a long way in to meeting the fiscal targets.”
He added: “Greece needs to meet the agreed fiscal targets and implement the agreed structural reforms to fulfil the conditionality and ensure funding from its partners. This is fundamental to ensure the sustainability of public finances, to improve perspectives for the Greek citizens in terms of growth, jobs and welfare.”
Rehn continued: “Staff of the European Commission will return to Athens in the coming days to provide technical support to the Greek authorities in their ongoing work. Once Greece meets the conditions, I expect the review by the troika could be concluded by the end of September.”
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Eager to show its determination to meet its fiscal targets, and to allay fears that the country is on the brink of a default, the government united on plans for a new property tax during an extraordinary cabinet meeting in Thessaloniki.
Dismissing claims that Greece could leave the euro zone, Prime Minister Papandreou insisted that his government would take whatever measures necessary to avert bankruptcy.
Defending the government's decision, Greek Finance Minister Evangelos Venizelos underscored that the proposed property tax, which would be imposed in Greece over the course of the next two years, is the only measure that can be enforced immediately and produce results quickly, and which can be applied universally.
Expected to generate in the region of EUR2bn for the state and to enable the government to meet its 2011 budget deficit target, the levy will be collected through electricity bills instead of via the usual tax collection mechanism, Venizelos explained. The tax will range from EUR0.50 to EUR10 per square metre, depending on the location of the property and will be imposed over a two-year period.
Commenting on the latest announcement, EU Economic and Monetary Affairs Commissioner Olli Rehn stated that: “I welcome the expressed commitment by the Greek government to fully meet the agreed fiscal targets this year and next, and to take the necessary consolidation measures to achieve these objectives. Today's decisions, including the levy on real estate, will go a long way in to meeting the fiscal targets.”
He added: “Greece needs to meet the agreed fiscal targets and implement the agreed structural reforms to fulfil the conditionality and ensure funding from its partners. This is fundamental to ensure the sustainability of public finances, to improve perspectives for the Greek citizens in terms of growth, jobs and welfare.”
Rehn continued: “Staff of the European Commission will return to Athens in the coming days to provide technical support to the Greek authorities in their ongoing work. Once Greece meets the conditions, I expect the review by the troika could be concluded by the end of September.”
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Disclaimer: Nothing I say should be taken as tax, legal or financial advice. Anything I say is for general informational purposes only. Always seek independent professional advice.
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Disclaimer: Nothing I say should be taken as tax, legal or financial advice. Anything I say is for general informational purposes only. Always seek independent professional advice.