1 THE LIMITS OF AUSTERITY “The missed target was mainly the result of the deeper-than-anticipated recession of the Greek economy...” “Economic growth has fallen short of forecasts, while the government has faced problems cracking down on tax evasion...” “There are fears that more cuts could deepen the Greek recession...” The Economist, “The limits of austerity”, Apr 26 th 2011
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Presentation by Antonis Samaras, Zappeio II (12/5/2011)
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1
THE LIMITS OF AUSTERITY
“The missed target was mainly the result of the deeper-than-anticipated
recession of the Greek economy...”
“Economic growth has fallen short of forecasts, while the government
has faced problems cracking down on tax evasion...”
“There are fears that more cuts could deepen the Greek recession...”
The Economist, “The limits of austerity”, Apr 26th 2011
2
Tax rate on corporate profits : 15%
Taxation on dividends : 15%
Highest income tax rate
Initial stage: October 2009 level (falls from 45% to 40%)
Second stage : in 3 years time it will not exceed 30%
Tax free limit in line with current
Less tax brackets
VAT: 19% (upper category), 9% (middle category)
and 4.5% (low category)
Tourist package : 4.5%
Fuel Tax: In 2 years time we remove the additional special tax that was imposed by Pasok
Reduction on employer social insurance contribution by: 25% Tough sentences for undeclared employment
Gradually phasing out of the so called taxes on behalf of third parties
REDUCTION ON TAX RATES
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Tax evasion increases
Tax evasion increased in 2010
despite the expectations of the government.
”The loss of revenues from the increase of VAT tax evasion was
approximately 1.1 billion euro and the loss of revenues from the
increase of income tax evasion exceeded a billion euro.
o “Annually the direct tax evasion and the loss of income from vat and
taxable income and property exceed 12 billions euro (5 billion from
VAT plus 7 billion euro from income tax and property.”
Alpha Bank, weekly economic bulletin , January 27
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principles results
1st Reduction on tax rates Reduce motivation for tax evaders