1 Jul 2015
Tsipras letter: still fighting for pensions and VAT
FXStreet (Buenos Aires) - Athens is still negotiating despite officially entering in default last Tuesday. The market is again convulsed after news made the rounds that PM Alexis Tsipras has sent a letter accepting the latest deal, with some conditions that include maintaining the VAT discount, and delaying pension reforms to October 2015.
Here are the main paragraphs:
" VAT reform: Maintain the 30% discount on islands, to be applied to the new rates."
" Pensions: The 2010 reform will be fully implemented but the 2012 reform (sustainability factor) will be postponed until the new legislative reform is implemented in October 2015. EKAS will be phased-out by end-2019 but without any immediate action on the top 20% of beneficiaries. All nuisance charges will be phased out by end-2017, starting from October 31, 2015."
"Fiscal structural measures: Gradually increase the advance payment of individual business income tax to 100 percent and phase out the preferential tax treatment for farmers (including the subsidies for excise on diesel oil) by end-2017. Reduce the expenditure ceiling for military spending by €200 million in 2016 and €400 million in 2017 through a targeted set of actions, including a reduction in headcount and procurement."
The letter ends with the announcement of implementing some strategy against corrupt business, an issue that the IMF has consistently rejected, as per having little hopes of collecting from the riches.
Here are the main paragraphs:
" VAT reform: Maintain the 30% discount on islands, to be applied to the new rates."
" Pensions: The 2010 reform will be fully implemented but the 2012 reform (sustainability factor) will be postponed until the new legislative reform is implemented in October 2015. EKAS will be phased-out by end-2019 but without any immediate action on the top 20% of beneficiaries. All nuisance charges will be phased out by end-2017, starting from October 31, 2015."
"Fiscal structural measures: Gradually increase the advance payment of individual business income tax to 100 percent and phase out the preferential tax treatment for farmers (including the subsidies for excise on diesel oil) by end-2017. Reduce the expenditure ceiling for military spending by €200 million in 2016 and €400 million in 2017 through a targeted set of actions, including a reduction in headcount and procurement."
The letter ends with the announcement of implementing some strategy against corrupt business, an issue that the IMF has consistently rejected, as per having little hopes of collecting from the riches.