While imposing heavy taxes on the private sector, the Greek Government appears unable to cut excessive public expenditure and is continuing to favour the corporatist elite, which is still enjoying increasingly outrageous privileges.
As a result of this unfavourable tax environment, combined with excessive state intervention, the Greek economy remains inefficient, with healthy firms being forced to close down and investment being diverted towards competing countries, thereby discouraging private initiative, prompting young people to leave the country and plunging older people into the nightmare of long-term unemployment.
Under the new scheme, for example, the tax rate for the professions is as much as 45% with 100% of tax for the following year payable in advance. Furthermore, subsidies are being added to the net profits declared by farmers and insurance contributions are also to be calculated on this basis.
As a result, taxes and insurance contributions combined will, in many cases, actually exceed the annual incomes of individuals and companies in the private sector, with disastrous consequences for the social and economic fabric of the country.
In view of this:
Can the Commission say whether the Greek Government’s decision to impose excessive taxes on the private sector is the result of pressure being brought to bear by its creditors?
Why are the latter not calling for public spending cuts and an end to excessive state intervention, in addition to more taxation?