A third plan expected to be submitted by the Greek government to institutional creditors in order to cover a 1.8-billion-euro gap in a 5.4-billion-euro total package over the 2016-2018 period lists no less than 10 indirect tax hikes and two spending cuts.
A third plan expected to be submitted by the Greek government to institutional creditors in order to cover a 1.8-billion-euro gap in a 5.4-billion-euro total package over the 2016-2018 period lists no less than 10 indirect tax hikes and two spending cuts.
The package of measures is demanded by the "quartet" to cover expected fiscal gaps in three upcoming state budgets, with the two sides still disagreeing over the level of the shortfall.
According to a draft presented by “N” on Wednesday, the finance ministry’s plan foresees a “special overnight tax” tacked on to hotel bills, an expected round of increases in the special fuel consumption taxes – including LPG – yet another fee increase on mobile telephony, the “debut” of a tax on cable TV subscriptions, a higher customs clearance charge for new vehicles as well as a “radical readjustment” of charges on lottery and sports betting pools, i.e. higher taxes.
Another “novel”, by Greek standards, fee will reportedly be slapped on the owners of vehicles with foreign license plates entering Greece – a measure not aimed so much at tourists, but on Greek citizens increasingly registering high-end vehicles in neighboring countries but using the cars in Greece.
Beyond higher taxes, direct and indirect, spending cuts are described as a hiring “freeze” in Greece’s core and wider public sector, along with a modest cut of 100 million euros in defense spending. Initial proposals had called for up to half a billion euros in defense spending reductions.
The all-important “feedback” by institutional creditors (Commission, ECB, ESM, IMF) will then, in all probability, finalize the package.
For instance, the Greek side has hinted that the IMF wants the VAT rate increased in utility (power, water) charges, ostensibly because VAT remittances from the specific sector are very predictable, as opposed to VAT remittance from the restaurant-bar-café sector.