The IMF wants to blow up the Greek economy

The members of the IMF technical team, which the government had asked in October to provide technical assistance in view of the tax reforms, put forth irrelevant proposals that could blow up the Greek economy.

In a mammoth report of over 100 pages, they suggest among other things, a doubling of VAT and tax on deposits, bonds and rent. Specifically, the IMF recommends:

- transfer of all goods and services from 6.5% to 13%. The IMF report proposes "abolition of the minimum rate of 6.5% which includes only hotels, medicines, books, magazines and theater tickets. This measure could generate about 360 million euros
   
- imposition of a single VAT rate at 19% -21% on all goods and services (other than hotels and tour packages that may be subject to a reduced 9% or 11%). This represents an increase from 13% to 19% or 21% VAT, burdening food, medicines, electricity, water and gas bills, public transport tickets, taxi fares, medical visits and examinations, medical care etc.
   
- elimination of the 30%-reduced VAT rates applicable to the Aegean islands. This means an increase in tax for residents of the islands by 5% or 9% to 13% and from 16% to 19% or 21% for all other goods and services
   
- increase of the minimum annual gross revenue for the integration of business at normal VAT status from 10,000 euros on sales of goods and 5,000 euros for the provision of services, to 25,000 for both cases. This gives a chance for the integration of farmers who exceed a certain threshold production into a normal VAT status
   

- imposition of specific excise duty on plain and sparkling wine
   
- imposition of fixed excise duties on tobacco for the making of rollup cigarettes
   
- modification of registration tax so that used cars be taxed less favorably and introduction of a precise criterion on carbon dioxide emissions
   
- rationalization of the system of special charges and clarification of the nature of the relevant transactions
   
- elimination of taxes in favor of third parties and collection of all revenue within the state budget
   
- simplification of the tax scale by reduction of the number of tax brackets from eight to three or four, without reducing the maximum rate of 45%
   
- conversion of the tax-free limit to non-refundable tax credit
   
- imposition of 25% tax withholding on income from dividends, elimination of the tax on dividends and later, a decrease in this tax rate to 20%
   
- replacement of the value of transactions in shares not listed on the Stock Exchange with a capital gains tax
   
- establishing a tax-free limit on repairs and maintenance of property, etc. as a fixed percentage of income from rents
   
- increase in tax rates of general partnership companies from 20% to 25%
   
- tax increase for internal shipping based on tonnage
   
- elimination of tax exemption of interest on bonds for banks and insurance companies (only if the economic situation of the country allows it)

- replacement of existing tax incentives with tax return on equity

- consolidation of real estate tax rates for companies between 0.6% -1% depending on the expected revenue

- elimination of the reduced personal income tax by 10% of the cost of mortgage interest of the first home. As argued, "the deductibility of interest on loans creates distortions as it causes over-investment in property"

- reduction of real estate transfer tax
   
- elimination of tax exemption for agricultural land held by natural entities
   
- automatic increase in objective values ​​each year.