The new property tax which was announced by the Greek government last Sunday, in a hasty measure to raise extra revenue to prevent default, has met with objections. The tax which is to be imposed will hit foreigners with property in Greece in addition to Greek residents. It is estimated it will add an extra $1,000 tax liability on average households already struggling with increased taxes and austerity measures.
According to Yahoo News
, economists have predicted the tax will cause the recession to deepen even further. The Federation of Greek Commerce asked
“Really, how many times must we buy our shops and our homes.”
Amidst the Greek populace there is anger that the burden of meeting fiscal targets is falling on ordinary people as the largest tax evaders
continue to avoid their obligations. Labour Union GSEE stated
“The government should get cash from those who are rich and evade taxes.”
The method of tax collection planned has also raised controversy. The property tax will be added to electricity bills, with government instructions to DEI to turn off the electricity supplies of those who fail to pay the tax. Nikos Fotopoulos, head of the electricity workers union GENOP, declared
“The Greek electricity company will not be blackmailed into doing this”
reports. He added
“We will not turn off electricity supplies if this barbaric new tax is not paid. The company is not a tax collecting machine.”
DEI already collects taxes via electricity bills towards the running of local councils. However Greek tax collectors are currently engaged in strike action whilst there are mutterings of the electricity company also striking if the government forges ahead with its plans. Thousands of people are expected to demonstrate against the tax on Sept 18.
Greek newspaper Ta Nea criticized the tax, writing
"The government won't be able to defend this sudden tax decision unless it proves it can crack down on tax evasion and drastically reduce state spending.”
The Athens Bar Association is planning a legal challenge against the new tax. Yiannis Adamopoulos of the ABA told Ekathermini
“Real estate is subject to tax when people own it, when they transfer its ownership and when they earn money from it.” He stated “A new property tax would create unbearable pressure, it would affect its value and damage the constitutional right of ownership.”
Complaints have also been raised that hotels may be exempt from the tax and that the Greek Orthodox Church should also be forced to pay tax on its properties.
PASOK is under tremendous pressure to meet conditions to receive the next tract of loans from the E.U. but a speedily invented last minute tax demonstrates a lack of forethought in addressing the real budgetary crisis Greece is suffering.