The Ministry of Finances is working on the finer details of its heating benefit in order to present a full plan. At the same time the government is putting the final touches of its new property tax and making some changes in the taxation of real estate in settlements and buildings on agricultural land.
Regarding the heating benefit, everything will depend on the troika’s willingness to accept a 15% reduction of the special consumption tax on heating oil, which will result in a 5-cent per liter discount for all households, regardless of income or other criteria. According to a senior Finance Ministry executive, if the troika refuses this, the government will increase the benefit from 28 to 35 cents per liter.
The Ministry is not too optimistic though, since they have not introduced another measure to cover for the reduced revenue. Furthermore, the plan does not include any changes to the location criteria or the amount of oil available through the benefit. Instead the Ministry has widened the income criteria, so that the benefit is available to a greater number of households.
The numerous complaints about the excessive taxation of the proposed property tax, such as real estate in settlements and buildings on agricultural land, has prompted the Ministry to look into revising its plans. The government has proposed to the troika to not increase the collectability clause for the property tax. This means that if the government meets its income goals, tax rates will automatically be reduced.
The troika demands that about 2.9 billion euros be collected through the property tax. With an 80% collectability rate, the government must certifiably collect 3.5 to 3.6 billion euros of taxes. The troika however wants that rate to be less than 75%, which entail 3.8 to 3.9 billion euros of taxes imposed.
