* Greece submits tax bill to parliament
* Tax bill is condition to unlock bailout funds next year
* Aims to boost tax revenues by 2.5 bln eur in 2013-2014
By George Georgiopoulos
ATHENS, Dec 14 Greece has formally unveiled a
bill to boost tax revenues under the terms of its international
bailout, part of a two-pronged attack to get its citizens and
firms to pay their way.
The planned measures are estimated to increase tax revenues
by about 2.5 billion euros in 2013-2014, the finance ministry
A second bill to be introduced later will to reform a tax
administration widely seen as corrupt and ineffective in
combating rampant tax evasion.
The first bill, introduced, late on Thursday, scraps many
tax exemptions and raises tax rates on property, companies and
households with above-average income. There is also a tax on
capital gains for stock sales.
"The proposed legislation is part of wider plans to create a
just and effective tax system, reorganise the tax collection
mechanism and apply a stricter framework against tax evasion,"
said the draft legislation.
The bill is part of an overall 13.5 billion euro austerity
package for the next two years that Athens passed last month to
qualify for further EU/IMF bailout funds.
Wage cuts and tax increases will keep the economy in a sixth
consecutive year recession in 2013, bringing total economic
contraction in 2008-2013 to 24 percent, according to estimates
by the country's central bank.
Getting the tax bill through parliament is among the
conditions Athens must fulfill to get 14.7 billion euros in
rescue loans by the end of March, on top of the 34.3 billion its
lenders cleared on Thursday for disbursal.
Athens depends on the bailout funds to avoid a chaotic
bankruptcy that might force it to exit the euro and to
recapitalise its banks, a key condition for economic recovery.
The tax bill will be a further test for the cohesion of
Greece's fragile, three-party ruling coalition under
conservative prime minister Antonis Samaras.
The austerity measures it has taken since winning power in a
June election have dented its popularity. A Public Issue/Skai
poll published on Friday showed the leftist, anti-bailout Syriza
party with a 4.5 point lead over Samaras's New Democracy party.
A date for a parliamentary debate on the tax bill has not
been set yet. According to a government official, it might be
voted after the Christmas holidays.
TOP TAX RATE AT 42 PCT
Under the draft legislation, Greece will raise the tax rate
on corporate profits to 26 percent from 20 percent but lower the
tax on distributed dividends to 10 percent from 25 percent.
Capital gains from stock trading on the Athens stock exchange
will be subject to a 20 percent tax from April next year, while
interest income from bank deposits will be taxed by a higher 15
percent rate versus 10 percent currently.
The bill reduces the current eight tax brackets to three,
imposing a 42 percent top rate on incomes above 42,000 euros.
Currently, a 40 percent tax rate applies to those earning over
60,000 while incomes over 100,000 are taxed at 45 percent.
Wage earners and pensioners earning up to 25,000 euros will
be taxed at 22 percent. Incomes above 25,000 and up to 42,000
will be taxed at 32 percent.
Rental income up to 12,000 euros will be taxed at 10
percent. Above this threshold the tax rate will be 33 percent.
The tax reform will do away with many tax exemptions,
including part of the interest paid on home loans and insurance.
But there will be relief for those earning up to 21,000 euros a
year -- a 2,100 euro tax credit, phase out on higher earners.