Greek Taxes Still Slow Recovery Hopes, Scare Off Investors

(Photo by IconPress/Christos Doudoumis)

Although the new New Democracy government has cut the corporate rate from 29 to 24 percent and said it will be cut again in 2020 to 20 percent, an avalanche of taxes imposed by the former ruling Radical Left SYRIZA has thrown a monkey wrench into a faster recovery.

This year’s International Tax Competitiveness Index by the US-based Tax Foundation placed Greece 30th among the 36 member-states of the Organization for Economic Cooperation and Development, a Paris-based group, said Kathimerini.

Since 2014 – when a previous New Democracy government was ruling – and through the 4 ½ years of SYRIZA’s reign, Greece has been stuck between 27th and 32d place in the index which was first published that year.

Greece ranks 29th in corporate taxation and 28th in property taxes, with New Democracy also planning to cut the hated ENFIA property tax surcharge that SYRIZA kept after then-Premier Alexis Tsipras said he would eliminate it.

The Tax Foundation’s analysts note that many property taxes tend to be highly distorting and complicate taxpayers’ lives and doing business, another obstacle, as excepting  land taxation, most asset taxes increase economic distortions and bring about long-term negative effects on the economy and its productivity.

In August, Finance Minister Christos Staikouras told The Financial Times that tax reforms are his “key priority,” to accelerate a slow recovery from a 9-½-year-long economic crisis a year after the end of 326 billion euros ($362.03 billion) in three bailouts.

He said the government is planning “a comprehensive tax reform that will have a four-year horizon and will accelerate growth,” that will focus also on cutting income taxes and the Value Added Tax (VAT) providing tax incentives for investors and ending the hated ENFIA property tax surcharge demanded by the country’s lenders.

“The fundamental objective is to achieve sustainable high growth rates so as to gradually restore the country’s lost wealth,” Staikouras told the site.