Mr.Petsas mentioned that this important measure had been discussed for a long time both with POMIDA, which had proposed it two years ago, and with the Technical Chamber of Greece.
> this cannot be done directly.
According to Mr. Petsa, the government’s basic plan is if, for example, someone spends 10,000 euros on operational upgrades or energy shielding of a property whose tax deduction is 4,000 euros. In any case, however, he emphasized that if necessary, the fiscal burden should also be taken into account.
As the government representative explained, the government’s goal is to stimulate the construction sector which received a strong blow during the crisis years. “The construction sector corresponded to 12 percent of the GDP and with the crisis it was precipitated. Right now it’s starting to pick up and we want to get to a level that’s 3 to 4 percent of that.” he said. “There is a large stock of unsold houses and we are giving an incentive to make the villages and towns look good,” she stressed, stressing the need to end the degradation and ghettoization of areas that can cause their abandonment and bad feeling.
From POMIDA’s point of view, it is noted that a few days ago there was some uncertainty as to whether the deduction would be from the taxable income, so the measure would be “burned”, or from the tax. For this reason, POMIDA informed all the relevant actors, and to the Minister of Finance Mr. Christos Staikouras, who had referred to this matter at this year’s Panhellenic Conference of POMIDA, he had sent it from 30.9.2019 her letter in which she stated the history of the matter and the consequences of any change of line on it, and requested an urgent meeting with him. The text of the letter, which was apparently not sent in vain, read as follows:
To the Minister of Finance, Mr. Christos Staikouras, Herein Athens, 30.9.2019
SUBJECT : Request for a meeting in relation to the tax deduction for property renovation.
Dear Minister
In view of the drafting of the tax bill, please schedule a meeting with the Bureau of POMIDA as soon as possible, in order to let us know about our views and proposals regarding the improvement and rationalization of the taxation of income and capital of private real estate, so that this sector can again become a factor of economic development and employment in our country.
In particular we would like to inform you about one of the most important announcements of the current government, the tax subsidy for the energy, functional and aesthetic upgrading of existing buildings ,a measure of enormous importance for our economy and society, proposed by POMIDA to the economic staff two years ago, with the aim of upgrading existing buildings and changing the face of our country’s cities!
We all know that the majority of renovation work today is carried out without the issuance of legal documents becauseduring the crisis the tax burdens on both sides multipliedwith result in the state claiming:
– From the owners-employers concerned, 24% for VAT on of materials and works and 90% approximately on the presumptive daily wage for employer contributions, not counting the paperwork and the cost of issuing building permits!
– From craftsmen, subcontractors, material traders, etc., 22-45%for income tax, up to 10% forsolidarity contribution and 20.28% for their insurance contributions to EFKA, literally deflating their collections!
These huge charges and the absence of any incentive in favor of the owners to issue invoices, have as a common result the issue of minimal or no tax documents for the renovation works of houses and small and medium-scale buildings.
The overturning of this given practice can only be achievedby subsidizing the entire expenditure for the energy, functional and aesthetic upgrading of the existing buildings, with accounting (through TAXISNET) reimbursement of 40%(50% was our original request) of the total cost, based on the legal tax data (invoices) provided for the provision of services and the purchase of building materials.
This subsidy will not be paid to the taxpayer but will be credited in his favor in the application of the AADE MyTaxisNet , from wherethe amount of the subsidy will be able to be used exclusively for offsetting payments of all kinds of taxes and obligations to the State, within the next 3 to 5 financial years at the most.
By applying the deduction of 40% of the expenditure from the taxpayer’s taxes,on the one hand the State will gain because the taxes and contributions that will be collected are significantly more than this subsidy, at the same time the tax compliance index will not improve, reducing uncollected taxes.
This had been proposed, this had been accepted and this was announced! But the relevant Deputy Minister in a recent TV show stated that the 40% deduction will be made from the taxable income of the owner >, and not from his taxes! If this finally happens:
- Those with low incomes will be the big losers. The “discount” will be insignificant, much lower than the VAT they will have to pay in advance, to get back “crumbs”, a year later…
- Those with incomes from 37,000 – 41,000 euros per year, they will simply get back approximately the VAT they have paid in advance, a year later…
- Those with higher incomes will have an insignificant difference beyond the VAT, for the which will not even be worth pushing the professionals to issue invoices.
- So if the 40% discount is legislated by the taxable, and not by the tax, the renovation in our country, where it is done, will continue to is done as it is now, “by the light of the moon”…
- On the contrary, the State will be forced to return several million euros, a “gift” to conditions they renovate by purchasing from large businesses – chains that issue invoices anyway, and to companies that renovate their properties! Thus, the “measure” will develop into a real “Waterloo” collection for the revenues of the Ministry of Finance, and for this reason, our recommendation is that it should not even be legislated in this form…
etc. And this would be the only measure that would somewhat ease the taxation of their incomes, given that their existing usurpation tax scale remains unchanged…
With very special regards
The President of POMIDA
Stratos I. Paradias
