The first bill deals with the increase of the percentage of the special contribution to the defence fund on the interest debited or credited within the Republic, from 10% to 15%, while the percentage of the special contribution to defence on dividends would increase from 15% to 17%. With the implementation of this measure, the state plans to get an income of 65 million euros annually.
The second bill provides for the creation of an additional taxation scale of 35% for persons with an income of 60,000 euros or more. This will give the state an additional 5 million per year and, once it becomes law, it will take effect from 2011.
The third bill provides for increasing the immovable property tax.
Specifically, owners of property, which was valued in 1980 up to 120 thousand euros, will not have to pay immovable property tax. However, owners of property in 1980 which was valued at 120,001 to 170,000 euros will be subject to 0.4% tax. Owners of property which in 1980 was valued between 170,000 to 300,000 euros will pay 0.5% tax; owners of property valued in 1980 from 300,000 to 500,000 euros will pay 0.6% tax, while those with property valued between 500,000 to 800,001 euros will pay 0.7% tax. Owners of property valued in 1980 at 800,001 or more will pay 0.8% tax.
The government estimates 24.2 million euros in income from this measure.
The fourth bill regulates pension benefits of civil servants, semi-governmental employees and local authority employees and outlines that new employees will join the Social Insurance Fund and pay same contributions as the private sector, thus abolishing pension funds.
It also provides for increasing the contribution to the widows and orphans fund from 0.75% to 2%.
The law will come into effect the first day of the second month after it is issued in the Official Gazette.
The fifth bill deals with the contribution of the gross income and pensions of public sector employees, semi-governmental employees, local authority employees and those working at school boards.
The special contribution of 3% on the gross income or pensions will be valid for three years.
It is clarified that the special contribution of 3% will be calculated on the monthly basic salary, any general pay rise or cost of living allowances, all benefits for compensation or overtime, and all flat benefits given to highly paid civil servants.
The 3% contribution concerns those working full time, part time, on an hourly basis and pensioners. It includes all officials except the President of the Republic, Ministers and members of the House of Representatives.
The overall contribution to state coffers is estimated at 90 million euros and, if the bill is passed into law, it will take effect the first day of the second month after it is published in the Official Gazette and will be valid for 36 months.
The last bill provides for an increase of VAT to 17% from 15% and it is estimated to bring an income of 160 million euros to the government funds. It will take effect from the 15th of September 2011.
The House plenary will convene in an extraordinary meeting on the 25th of August to vote on the law bills prepared to achieve fiscal consolidation. A debate on the measures will take place at the House Committee on Financial and Budgetary Affairs on the 22nd, 23rd and 24th of August.
