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Boosting tax morale in Greece

March 21, 2015

The Greek parliament has approved legislation giving people more time to pay taxes, according to the motto "better late than never." The government hopes the move will help fill empty state coffers.

https://p.dw.com/p/1Euvx
Greek flags in front of a one-euro sign denoting a discount shop in Athens. REUTERS/Alkis Konstantinidis
Image: Reuters/A. Konstantinidis

The legislation passed early on Saturday, which received wide support not only from the governing coalition, but also from opposition parties, will allow people struggling to pay their taxes to hand over the money in up to 100 installments.

People who pay all their taxes by the end of March will avoid any fines or extra interest.

The government estimates that some 76 billion euros ($82.2 billion) are currently owed to the state in taxes - an amount that makes up 42 percent of economic output.

However, it expects the law will help in recovering just 8.9 billion euros of the unpaid revenue.

The move comes as the government says it is aiming to create a "new culture of adherence to tax regulations" in a country notorious for its tax evaders.

Reform package

The new legislation is part of a package of reforms that the new Greek government, under the leftist Syriza party, hopes will boost the ailing economy.

Greek Prime Minister Alexis Tsipras on Thursday promised to present a list of concrete reforms to the country's international creditors as he seeks to persuade them to disburse the last tranche of a European Union-International Monetary Fund bailout aimed at avoiding bankruptcy and a possible exit from the eurozone.

In February, Brussels gave Athens until April to fulfill the conditions for the release of the final tranche of the 240-billion-euro ($255 billion) rescue package. Since then, both sides have been engaged in laborious negotiations with the EU accusing Greece of being uncooperative and Greece saying its creditors are being overly severe and preventing it from carrying out pledged social reforms.

Tsipras came to power early this year on the back of election pledges to put an end to years of austerity measures imposed from Athens' creditors in return for the bailout.

On Monday, he will visit German Chancellor Angela Merkel in Berlin in a renewed attempt to reconcile her strict stance on austerity with his declared aim of tackling the social problems confronting Greece, which has seen a rapid rise in poverty in recent years.

tj/sms (Reuters, dpa)