for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up
Bonds News

Greece unveils tax amnesty bill to boost revenues

* Govt eyes 500 mln euro revenues from scheme in 2010

* Tax settlement to rectify tax revenue shortfall

* Measure does not extend to large firms, shipping companies

ATHENS, Sept 27 (Reuters) - Greece offered on Monday to settle unresolved tax cases worth hundreds of millions of euros as the debt-laden country struggles to meet its budget targets amid an austerity-caused revenue shortfall.

The cabinet approved a bill allowing for a summary settlement of unaudited tax filings and arrears stretching back 10 years, officials said.

“There has to be a new start,” Prime Minister George Papandreou told the cabinet meeting, according to a transcript by his office. “There are 2.5 million unaudited tax filings stretching over a decade.”

The government expects to raise about 500 million euros ($667.2 million) from the measure this year, officials said.

Greece is scrambling to slash its budget deficit by 5.5 percentage points to 8.1 percent of GDP this year, to continue receiving emergency funding from the IMF and its euro zone peers under a 110 billion euro bailout agreed in May.

Austerity measures, including cuts in public sector pay and pensions, have deepened the economy’s recession, hurting budget revenue growth.

Eight months into the year, net budget revenues are growing at only 3.3 percent compared to a targeted 13.7 percent annual clip, despite a series of tax increases that included a rise in the VAT rate to 23 percent. [ID:nLDE6890K1]

More than 150,000 tax cases are still pending in courts with 1.3 million Greeks troubled with tax arrears that top 30 billion euros. This is because it takes seven to 10 years for a final court ruling, with tax authorities unable to check more than 3 percent of the pending volume of cases annually.

The government believes that with a clean bill of health, taxpayers will start building a relationship of mutual trust with tax authorities.

But critics say such settlements, which have often been offered in the past, are self-defeating because they encourage tax evasion.

“This measure is unfair for all honest taxpayers,” said Panos Panagiotopoulos, spokesman for the main opposition New Democracy party.

The settlement bill will not cover tax cases involving firms listed on the Athens Stock Exchange, those with annual sales exceeding 20 million euros, shipping companies, large property holdings and inheritance transfers. (Reporting by Harry Papachristou and George Georgiopoulos; editing by Stephen Nisbet)

for-phone-onlyfor-tablet-portrait-upfor-tablet-landscape-upfor-desktop-upfor-wide-desktop-up