Greek cabinet approves bill to boost fight against tax evasion

10:24, January 26, 2011      

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The Greek cabinet approved on Tuesday a wide-ranging draft bill which sets stricter penalties for tax dodging, boosts entrepreneurship through lowering business tax rate and regulates the on-line gambling which today is illegal in Greece.

From the financial year starting January 1 this year, the business tax rate on undistributed earnings drops from 24 percent to 20 percent, according to the bill presented by the Greek Finance Ministry. In this way Athens seeks to boost investments and competitiveness and overcome a deep recession.

The tax bill which will be tabled to the parliament for ratification in February, also introduces more strict sanctions for tax evasion, speeds up the legal procedures and establishes a special task force at the ministry to tackle major cases more effectively.

Tax evasion is regarded as a key factor behind the acute debt crisis which has hit Greece hard since late 2009, threatening the eurozone member state with bankruptcy last spring. Greece faced a burden of more than 300 billion euros (409.2 billion U.S. dollars) which still triggers scenarios of restructure.

After securing a multi-billion euro aid from the European Union and the International Monetary Fund (IMF) last May to face the crisis, Greece started to slash a budget deficit which reached 15. 4 percent of GDP in 2009, through a painful three-year austerity and reform program.

The tax bill is on the top of the agenda of talks Greek officials will have with a delegation of EU-IMF experts expected in Athens on January 27 ahead of the release of the fourth tranche of aid to Greece.

Besides cutbacks on state expenses, Greece has to increase revenues to lower the budget deficit to less than three percent by 2014. Combating tax dodging is regarded as a most significant key to success.

Furthermore, the new tax draft bill unveiled plans for the sale of 15 to 50 licenses for on-line gambling this year. Up to now gambling through the Internet is illegal in Greece. Through the regulation, the Greek government aims to raise more than 700 million euros (954.9 million U.S. dollars) this year.

Source: Xinhua

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