Greece Accepts to New Tax

September 28, 2011 Taxation in Greece

George Papandreou Announces Property TaxATHENS – Greece will instate a new property tax, in a bid to secure future financial aid from the International Monetary Fund and the European Union.

In an address to international media in Berlin on September 27th the Prime Minister of Greece George Papandreou announced that Greek taxpayers will soon face a new property tax. The announcement was made only hours before the Prime Minister was scheduled to hold talks with German Chancellor Angela Merkel regarding further bailouts for the debt stricken Greece.

The new tax will be levied on all residential properties in the country, and will need to be paid alongside taxpayers’ electricity bills. Failure to pay the tax will result in electricity being shut off to the respective property. According to the Greek government the new measure will be easy to implement but hard to evade. It is estimated that the new tax will cost the average Greek household up to EUR 1 500 per year, which could raise Greece’s annual tax revenues by EUR 2 billion. If the projected collections levels are realized, the government could reach its deficit target of EUR 17.5 billion.

The new tax was passed through parliament with 154 votes in favor and 146 against. Following the parliamentary voting sessions, several Members of Parliament said that while they voted in favor of the tax, they did so with a heavy heart and much debate. The passing of the new tax is being seen as a first step for the Greece in meeting budget targets needed to receive further IMF funding, and restoring stability to the European credit market.

Photo by World Economic Forum