ATHENS – After outrage over the cutting of electricity for poor households, Greece will stop the practice of putting an unpopular property tax surcharge – known as an “Haratsi,” in anger over a Turkish term for taxes during the Ottoman Occupation – into utility bills, the government said.
But the amount owed, which along with other increases has resulted in an 800 percent increase in some property tax bills the past few years as part of austerity measures demanded by international lenders, isn’t going away. Instead it will be put into unified property tax bill that for the first time will also extend to farmers and other sectors, raising another outcry.
The tax was imposed by 2011 – supposedly for one year only – by then finance minister Evangelos Venizelos who ordered it put into power bills under the threat of having the electricity disconnected for non-payment. He’s now the PASOK Socialists chief and Deputy Prime Minister/Foreign Minister in the coalition government headed by Prime Minister and New Democracy Conservative leader Antonis Samaras.
The finance ministry said it would submit a bill to Parliament proposing a new levy on property to be collected directly by tax authorities from 2014. It said the levy was aimed at protecting Greeks with low-value homes.
Envoys from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) have okayed the plan, an unidentified finance ministry official told Reuters.
The Haratsi was extended for two more years, through the end of this year, by a government desperate for revenues to help repay the loans and write down a staggering debt that is still hovering around $430 billion.
The property tax and a second, smaller levy on real estate assets brought in about 2.9 billion euros ($4 billion) annually. Athens expects revenues to fall to 2.65 billion euros ($3.63 billion) under the new unified levy, the finance ministry official said, and to offset the projected shortfall, the government will cut its public investment program by 200 million euros ($274.5 million).
Critics of the haratsi said it unfairly targeted the poor. At least three people have died from smoke or carbon monoxide as they tried to keep warm by using charcoal grills, wood stoves or candles after their power had been cut off.
That prompted authorities to promise to restore electricity to homes and the energy ministry said 2,000 households had already had their power supply restored. Neither Venizelos nor Samaras said a word about the tragedies.