BRUSSELS (AP) — Greece has submitted a 13-page set of proposals to its European creditors that is intended to act as a foundation to free up a new three-year, 53.5-billion euro bailout package to save the nation from bankruptcy. Here are the main points of the package that the Greek parliament will debate Friday.
The Greek government is pledging to stick to primary surplus targets — meaning that the government is earning more in taxes than it is spending — of 1 percent this year, 2 percent in 2016, 3 and 3.5 percent in 2017 and 2018 respectively.
SALES TAX REFORM:
The proposals include a slew of tax hikes including a 23 percent value added tax on restaurants and catering, a reduced 13 percent tax on basic foodstuffs, energy hotels and water and a so-called “super reduced” rate of 6 percent on such things as pharmaceuticals, books and theater — perhaps appropriate for a country that pioneered drama. The new tax levels will kick into gear this October.
Moreover, special tax breaks for the country’s islands — popular tourist magnets — will be scrapped. Only the most remote islands will get to keep the coveted tax breaks.
Military spending will be slashed by 100 million euros this year and double that in 2016. Corporate tax will increase from 26 to 28 percent and farmers will lose preferential tax treatment and fuel subsidies. The government will enact a clamp-down on tax dodgers. The country’s huge shipping industry will also see a tonnage tax hike and the industry’s preferential tax treatments will be phased out. A luxury tax will be extended to cover recreational vessels over five meters (16.4 feet) and the rate will jump from 10 to 13 percent.
The government is looking at reforms that would bring permanent savings of