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Greece: New Bill to Abolish Tax Breaks for Members of Parliament, Introduce Salary Cuts for Ministers

(Aug. 14, 2015) On August 11, 2015, the Greek government discussed legislation that would abolish tax breaks for Members of Parliament and institute salary cuts for Ministers, heads of public administrations, and heads of independent administrative authorities. (The Draft Bill on Abolishing Tax Breaks for Lawmakers, INTELLIGENT-NEWS.COM (Aug. 11, 2015).) The legislation is part of the pre-election commitments undertaken by Alexis Tsipras, the current Prime Minister of Greece, and not part of the austerity measures imposed by the institutions involved in Greece’s third financial bailout, that is, the International Monetary Fund (IMF), the European Central Bank, and the European Commission. (Id.)

Highlights of the bill include imposition of:

• taxation on the full amount of monthly salaries received by the Members of Parliament, including the allowance received by MPs for participation in parliamentary committees. If approved, this measure will end the tax breaks enjoyed by MPs, under which only 75% of their salaries was subject to taxation, and the extra cash benefits they received because of work in the committees was tax free;

• a 15% reduction in the monthly salaries of Ministers, alternate Ministers, Deputies, and Secretary Generals of Ministries;

• a cap on the salaries of governors and members of boards of directors of publicly held companies and similar entities to the effect that such salaries will not be higher than 80% of the remuneration received by ministers who are not also members of the Parliament; and

• a cap on the compensation received by presidents and members of the boards of directors of public companies and similar entities to the effect that such compensation will not be higher than that of the President of the Supreme Court. (Id.)

Tsipras recommended that this draft legislation be submitted to the Parliament for adoption immediately. He noted that “it is not only a political initiative with economic results but also with a symbolic context.” (Email from ANAMPA, PM Tsipras Holds Meeting on MPs Taxation Draft Law (Aug. 11, 2015) (on file with author).)