The Greek government has just announced new proposals of reforms, such as the application of the 23% VAT rate to a larger number of products, introduction of solutions aimed at discouraging citizens from early retirement, increasing the tax on company gains from 26% to 29% as well as many others. Will they be enough to encourage the EU to maintain its support?
The reform proposals shall be assessed by the guests of the Ekonomia – Kapitał – Gospodarka (Economics – Capital – Business) programme hosted by Mr Maciej Zakrocki: Ms Małgorzata Starczewska-Krzysztoszek, PhD, of the Polish Confederation Lewiatan, Mr Maciej Bukowski, PhD of the Warsaw Institute for Economic Studies (WISE) and Mr Janusz Jankowiak of the Polish Business Roundtable.
Mr Maciej Bukowski, chairman of the Warsaw Institute for Economic Studies, believes the reforms in question are insufficient and fail to address the main issue, i.e. the lack of investment, lack of trust for the Greek economy and the absence of investors.
– Greece is a country which faces profound structural problems. Initially the government did not agree for the privatisation of its gold reserves, which could have brought about significant revenues. The latest reform proposals continue to seek savings on the taxation side. The proposed 23% VAT rate, in the light of the problems which Greece faces in the area in tax enforcement – does not appear to be a viable solution. The VAT rate on exports in the EU is zero, which results in tax carousels, with countries with weaker economies (such as Poland or Greece) unable to counter this phenomenon. As a result, the scale of abuse remains high, since the higher the VAT, the greater the temptation – Mr Bukowski added.
