Six bills submitted to parliament to cover package provisions

The government yesterday submitted to parliament six bills as part of an austerity package announced earlier this week:

* Increase in tax on interest rates from bank deposits from 10 to 15 per cent and an increase in tax on dividends from 15 to 17 per cent. The measure is expected to fetch €65 million per year

* Increase in income tax on income exceeding €60,000 per year from 30 to 35 per cent. Expected revenue €5.0 million

* The third bill provides for a decrease in the tax-free amount on immovable property and an increase in the tax rate. The bill cuts the tax-free amount, in place since 1980, from €170,860 to €120,000. Specifically, owners of property that was worth €120,000 in 1980 would not have to pay any tax. From then on, owners of property worth up to €170,000 will pay 4.0 per thousand in tax, 5.0 per thousand on property worth up to €300,000, 6.0 per thousand on property worth up to €500,000, and 7.0 per thousand on property up to €800,000. Owners with real estate above €800,000 will pay a tax of 8.0 per thousand. The government expects to collect €24.2 million from this measure.

* The fourth bill provides for newcomers in the civil service to be included in the social insurance fund on the same conditions as their private sector colleagues. It also calls for a raise in state workers’ contribution to the widows and orphans fund by 1.75 per cent to 2.0 per cent. The increase will save the state some €24 million a year.

* The fifth bill concerns the 3.0 per cent temporary contribution by civil servants – current and retired – that is expected to fetch €90 million per year. The cut will come out of the workers’ gross income, which includes basic salary, general raises, cost of living allowances, overtime pay and expense allowances paid to state officials in higher positions. The law will be in effect for three years, but unions have agreed to discuss an extension if necessary. The government has said that it will try and make this permanent.

* The final bill provides for a 2.0 per cent rise in VAT from 15 to 17 per cent, expected to fetch around €160 million.

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