15 November, 2006
Finance and Economy Minister George Alogoskoufis tabled the state budget for the 2007 fiscal year before the Parliament plenum on Tuesday, in the presence of Prime Minister Costas Karamanlis and the members of the cabinet.
Parliament President Anna Benaki-Psarouda announced that the discussion on the budget at the plenum will begin on Monday December 18 and be completed in five sessions, on Friday December 22 at midnight.
The relevant Parliamentary Economic Committee will be convened for the first session to examine the state budget on Wednesday November 22.
According to the bill, the growth rate of the Greek economy is anticipated at approximately 3.8 percent, spurred chiefly by investments. A 6.5 percent increase is also forecast in exports of goods and services while, on the negative side, a 7.0 percent increase is forecast in imports.
The main targets of the 2007 budget are boosting development and gradual reduction of the state deficit, while measures are provided for boosting the growth potential, consolidating the climate of fiscal discipline and stability in the economy, increasing the economy's outwardness, and strengthening social cohesion.
The budget further advances reform in the taxation of natural entities, while the dialogue between the social partners will also be continued on reforming the country's social insurance system.
The bill provides tax relieves for natural entities, and also foresees an improvement of the existing taxation environment for legal entities with the gradual reduction (by 2008) of the tax rate on corporate profits, as well as steps to stem tax evasion, corruption, the black economy and smuggling.
Total net revenues will increase by 6.2 per cent compared to 2006. According to this forecast, revenues will be at 25.4 per cent of GDP compared to 25.6 and 24.8 per cent in 2006 and 2005 respectively.
The central government's deficit will decrease to 4.3 of the GDP.
Revenues from direct taxes are anticipated at 19.450 billion euros, up by 4.8 percent in relation to 2006, while revenues from indirect taxes are anticipated at 28.580 billion euros, up by 8.8 percent over the corresponding revenues in 2006.
A substantial increase of 10.0 percent is further anticipated in revenues from Value Added Tax (VAT), estimated to reach 17.435 billion euros.
Regular budget spending (excluding interest payments) are projected to ease to 25.6 pct of GDP next year from 25.9 pct in 2006, with spending on supporting weaker economically classes totaling 1.2 billion euros.
Expenditure for salaries and pensions will account for 48 percent of the primary expenditure, whereas expenditure for insurance and healthcare will account for 22 percent of the overall primary expenditure.
The Public Investment Program is forecast to reach 8.75 billion euros next year, of which 6.35 billion euros for projects co-funded with the EU and the remaining 2.4 billion for projects exclusively funded by national money.
Finally, it is anticipated that strong economic activity will boost employment, thus containing the unemployment rate at 8.2 percent.
Source: Athens News Agency