The legislation, which has incited protest, looks to raise $3.28
billion from middle-income families, self-employed professionals and
Just a few hours after gaining approval for crucial rescue loans
to avoid a messy default, the Greek authorities presented a new tax
code late Thursday that would increase taxes on middle- to high-
income families, self-employed professionals and farmers.
The bill, which was part of the conditions Greece agreed to with
international lenders, drew a hostile reaction from austerity-weary
Greeks before and after it was submitted in Parliament late
Thursday. It will be discussed by lawmakers before a vote, which
will most likely take place after Christmas, a Finance Ministry
The legislation is expected to be approved as the objections
raised by junior partners in the fragile coalition of Prime Minister
Antonis Samaras have been to details of the plan rather than to its
The government hopes to raise EUR 2.5 billion, or $3.3 billion,
by increasing the income tax rate on those earning more than EUR
20,000 a year. It will also trim tax benefits attributable to having
children and revoke tax breaks for farmers.
The plan would also increase the amount of income tax paid by
about a million self-employed professionals like doctors and
plumbers -- more than one-third of the country's work force. Members
of this group are widely perceived as not paying their fair share
by, among other things, understating their income so that it falls
below a tax-exempt threshold. Under the new rules, the threshold
would be abolished and the self-employed would be taxed from the
first euro they earn.
The bill also raises the tax on corporate profits to 26 percent
from 20 percent, while lowering the tax that companies pay on
distributed dividends to 10 percent from 25 percent.
"The proposed legislation is part of wider plans to create a just
and effective tax system, reorganize the tax collection mechanism
and apply a stricter framework against tax evasion," the Finance
Ministry said in a statement accompanying the 74-page bill.
The tax bill, dubbed the "mini tax reform" by Finance Minister
Yannis Stournaras, is the first of two tax overhauls. The mini bill
is part of Greece's commitments to creditors to save EUR 13.5
billion over the next two years, through austerity measures and tax
hikes, to reduce the country's budget deficit and make debt
Early next year, the government plans to introduce a more
thorough overhaul of the tax system, introducing immediate jail
sentences for large-scale tax evaders rather than the suspended
terms currently given.
In return for the promised measures, Greece's creditors agreed
during the past week to release EUR 50 billion in funds to help
Greece avoid default through the winter.
The E. …