Deputy Minister of Finance Nadia Valavani announced on Wednesday that a new exceptional measure for the repayment of old tax debts in 100 installments will be added in the government’s draft bill on humanitarian aid that was tabled in parliament on Tuesday. Talking to Mega television, Valavani said that she intends to submit the draft bill that provides for the repayment of tax debts in 100 installments over the weekend and noted that the bill will not be subject to negotiation with the Eurogroup. Valavani stressed that this is not a unilateral action as the bill will bring much-needed revenues to the Greek state. The bill also needs some legal drafting improvements. The humanitarian aid draft bill has been especially developed to deal with the humanitarian crisis and focuses on helping people living under “dire poverty” conditions. The deputy minister clarified that the new draft bill will not include the previously announced provisions that promised a hefty haircut on the overall amount owed in exchange of “early repayment.” She stressed that this is not backpedaling since she believes that it would be an effective measure. However, she said, she had to respect the opinion of economics experts in the ministry who were against the haircut. Nevertheless, in this “express adjustment” of debt to the state, all penalties and surcharges will be erased if debtors come forward until the end of March. If the debtor pays the actual amount in full, all penalties and surcharges will be erased automatically. If he pays the actual capital owed in 2 to 5 months, 90 percent of extra charges are erased. If he repays in 6-10 months, 80 percent of surcharges and penalties are erased. For instance, if someone owes the state 10,000 euros, and 4,000 of that is penalties and surcharges, he can pay 6,000 euros in full and clear off. If he wants the maximum of tranches (100), he will have to pay 10,000 euros. This will apply to those who have outstanding debts up until January 1st, 2015. Something similar will apply to those who owe contributions to security funds. Regarding the provision of the tax-free threshold of 12,000 euros, Valavani said that it will be included in a new draft bill to be tabled in the second semester. Regarding the existing single property tax (ENFIA), the deputy said that it will be replaced by the new large property tax (LPT). She added that the new tax will be tabled by June, after the readjustment of objective values of real estate properties. She added that those who have real estate property of less than 500,000 euros — or maybe a little less — will never pay property tax. Finally, Valavani said that there won’t be any changes in value added tax. There may be some minor adjustments but not real changes. VAT on cigarettes and alcohol will remain the same.
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