Monday, September 1, 2014

Greece seeks tax cut from troika after years of belt-tightening

by Kerin Hope

Financial Times

September 1, 2014

Greece is seeking to persuade its international creditors that it is entitled to a 2015 tax cut after years of wrenching austerity since the country is now on track to outperform its fiscal targets by a comfortable margin this year.

Gikas Hardouvelis, a technocrat who took over in July as finance minister, will make that argument during meetings in Paris on Tuesday with officials from the troika of lenders – the European Central Bank, the European Commission and the International Monetary Fund – overseeing the country’s bailout.

Mr Hardouvelis says Greece’s primary budget surplus, before debt repayments, will exceed this year’s target of 1.5 per cent of national output – although he has not revealed by how much.

A series of tax reductions – in value added tax, a special levy on heating fuel and the so-called “solidarity tax” paid on annual incomes above €12,000 – are among the measures Mr Hardouvelis is expected to propose to the troika.

Cuts to any of those levies would offer much-needed relief to Greek taxpayers burdened by unprecedented property taxes and other special measures to help pay for the bailout. It would also reinforce the message that Greece has at last emerged from a historic crisis.


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