Greek Gov’t Tables New Omnibus Bill to Expedite Negotiations

The new omnibus bill presented by the Greek ministry of finance will be tabled in parliament on Thursday in order to expedite negotiations with creditors and reach an intermediate deal.

The new bill includes several measures and reforms such as methods of tackling tax evasion, revenue increase from value added tax collection, strict penalties for tax evaders and protection of primary residences from foreclosure.

The measures will be presented to lenders as the agreement of February 20 requires.

The draft has 12 main points:

1. Restriction in transactions with cash. So far, the law allows that transactions under 1,500 can be paid in cash. The limit will be reduced drastically, down to 100 euros perhaps.

2. Stricter penalties for tax evasion. In case of undeclared revenues, there will be no penalties but criminal prosecution.

3. Taxpayers will be getting bonus points for early payment of taxes. The bonus points will translate in tax deductions, faster return and so on.

4. Alternatively, the ministry may introduce the “receipt lottery” for tackling VAT evasion. Since many retailers and service providers do not give receipts, the motive to use a receipt as a lottery ticket would make consumers to demand receipts for products and services.

5. Electronic monitoring of businesses. The General Secretariat for Public Revenue will have the right to create bogus businesses that would attempt to make electronic transactions with businesses suspected of tax evasion. The secretariat will create a new agency that will focus on electronic trade only, while there will be more auditing in businesses that work through the internet.

6. There will be mechanisms for confiscating wages of 1,500 euros and over of people who are evading taxes or owe to the state. The law regarding bank deposit boxes will be amended.

7. Measures for tackling oil smuggling, and contraband cigarettes and alcohol will be implemented. There will be mobile customs units that will be able to conduct investigation on the spot when there is suspicion of fake product trade. It is estimated that the government will collect 250-400 million euros in 2015 and 400 million in 2016.

8. Tax revenues from television advertising. As of June, television advertising will be taxed. The measure may apply to electronic media as well such as news websites. Estimated revenues 50-70 million euros.

9. Television frequencies belong to the Greek state therefore television channel licenses will be auctioned, based on OECD directives. Estimated revenues will be up to 380 million euros in 2015.

10. Licensing of electronic gambling. The government will sell licenses for electronic gambling providers. Every license will have an advance fee of 3 million euros. Furthermore, taxation of electronic gambling would bring revenues of up to 500 million euros per year.

11. Council for fiscal matters. The new council will make macroeconomics projections and monitor the state budget. It will be unified with the existing Office of State Budget that operates in the Greek Parliament.

12. Protection of primary residence from foreclosure and overall protection from bank confiscations for private debts.

Five measures that were originally on the list proposed by Finance Minister Yanis Varoufakis take the back-burner:

1. Elimination of tax exemptions.

2. Increase in luxury tax.

3. Payments to public utility companies will be made by debit card.

4. Part-time tax evasion “fighters” who will act as consumers in order to find tax evading businesses.

5. Revenues from Greece’s cultural heritage, such as raising museum entrance fees.