Greek Prime Minister Kyriakos Mitsotakis revealed the details for upcoming tax cuts to restore its credibility. The famous country in southeastern Europe aims to clean its reputation as the “black sheep of Europe.”
During a keynote policy speech at the annual trade fair in Thessaloniki, Mitsotakis said that Greece is a country with “self-confidence.” Adding that the new platforms will give Greece strong credibility.
The reforms plan to win over international lenders to favor easing the 2021 fiscal target. The prime minister’s plan also aims to help the austerity-dented country, its citizens, and businesses from the debt crisis.
The new PM from the Conservative party is the successor of Alexis Tsipras, and he was elected in power two months ago. Mitsotakis vows to revive the Greek economy a year after the end of Greece’s international bailout.
The Greek government remains under a magnifying glass to monitor and ensure that it meets the nation’s fiscal targets.
The new PM says he is confident that his administration can achieve a primary budget surplus as agreed with international lenders. The deal excludes debt-servicing costs of 3.5% in 2019 and 2020’s GDP.
By implementing reform projects such as modernizing its state and slashing red tapes, Mitsotakis hopes to convince lenders to lower the fiscal target to 2% in 2021.
Economists are expecting the Greek economy to grow by 2.2% in 2019, defying projections of a Europe-wide slowdown.
Cuts, Cuts, and More Cuts
Greek Prime Minister Kyriakos Mitsotakis’ plans include cutting corporate taxes from 28% to 24% by 2020. According to the Conservative PM, taxation on dividends will be slashed by 5% in 2020.
Mitsotakis added that the levy-free threshold on the Greek’s income will be stable. The new prime minister also vowed to lower the toll bracket. Hence, from 22% to 9% on the annual salaries of up to 10,000 euros of Greek citizens.
The 52-year-old politician said that the Greek government will hand out yearly bonuses to pensioners by the end of 2020.
The administration is set to slowly reduce the social security contributions by 5% by 2023 for full-time workers. Meanwhile, the annual toll of self-employed citizens will also be reduced in its medium-term.
Another sector that is important to the Greek economy is the nation’s real estate industry. In order to support the sector, Mitsotakis vows to drop capital gains tax on property sale and value-added taxes on new constructions for 3 years.
In an interview, Prime Minister Kyriakos Mitsotakis said that the Greek finance minister is set to submit an official request to the nation’s peers this week. Thus, the request aims to repay the nation’s loan from the IMF or International Monetary Fund.
Greece will follow in the steps of Portugal and Ireland in repaying loans. This is to put Greece on track for a comeback to its investment-grade bonds.
However, senior officials from the Eurozone remain neutral to the plan presented by Athens. Reports say that the country wants to repay around 3.7 to 4 billion euros from its 9-billion-euro debt from the IMF.