Tax deposit discount proposed for firms making investments

Companies making plans for investments could look forward to a reduction of taxation by 30 percent from 2021 if Greece’s creditors approve a government proposal for utilizing the profits of eurozone central banks from Greek bonds (SMPs and ANFAs) for investment purposes.

Finance Minister Christos Staikouras submitted this proposal in writing to the mission chiefs visiting Athens last week for the fifth post-bailout assessment. It was the next step following a Eurogroup decision on December 4 to examine the possibility of Greece using the SMP and ANFA proceeds for investments instead of spending them on servicing the national debt.

Sources say that the government proposal provides for the 4.2 billion euros of bond profits that will be returned to Greece in installments by 2022, to ideally be split almost equally between public and private investments. This means that a sum of over 2 billion euros could be channeled toward supporting private investment.

According to the proposal, the government could supply incentives such as the reduction of the tax deposit on profits, granted only to companies implementing investments. Last year the tax deposit was reduced by 5 percent for all enterprises, while in this case it would be a purely investment-orientated measure.

The remaining 2 billion euros would be destined for public investments, for public-private partnerships and for a mechanism for “maturing public investments,” as it is named. In practical terms, this means funding technical studies so that delayed public projects can move ahead. The lack of sufficient mature public projects has been one of the key obstacles creditors identified in the change to the use of the SMP and ANFA resources.

The government proposal also includes certain recommendations about major state projects for funding, such as the Northern Crete Highway, as well as some digital projects.

The decisions, according to the word of the creditors, are expected to be made at the Eurogroup in June, when the next disbursement of the SMP and ANFA profits installment of 650 million euros is to be decided, provided the next, i.e. the sixth, post-bailout assessment of the Greek economy in April and May is positive.

Source:ekathimerini.com