Taxes without exemptions on earnings, real estate and businesses

In the conclusion text of the auditors, the Troika announces the elimination of tax exemptions and preferential tax statuses "including those of geographical nature".  It will come in the name of the tax system’s "simplification", which the Ttroika requires that it be fiscally neutral (i.e. no loss of revenue for the state) and scan everything: direct and indirect taxes on incomes, corporations, real estate etc.

This means that all special tax-exemption statuses and tax exemptions for residents and workers in remote and island areas will be eliminated, while the 30% discount on VAT currently applicable in these areas is now being challenged. Thus, the rates are expected to increase from 2013, from the current 5 %, 9% and 16 %, to 6.5%, 13% and 23% respectively.

This elimination is a basic term for the new loan and PSI, the implementation details of which are being examined today by the Euro Working Group.

As the report by the EU team revealed, the new tax reforms:

-          ought to have been ready in September 2011, but now the government must announce a detailed schedule of consultation in March, so that everything will be ready in June

-          it should reduce the maximum tax rates on labor and aim at broadening the tax base

-          it will not reduce for the time being revenues from indirect taxes, as they are collected more easily than direct ones and social contributions due to tax evasion

-          it will combat tax evasion because horizontal cuts and new taxes are unfair and do not work. "Reduction of tax evasion will result in a more equitable distribution of the adjustment weight. Despite some progress, the implementation of these reforms has been slow and the results are not satisfactory", officials report

-          will increase the number of tax audits

-          provides for a new performance evaluation system of tax offices, by giving incentives to employees

-          will give new incentives and better protection for whistleblowers against corruption and tax evasion.