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Athens Macedonian News Agency: News in English, 16-12-24
CONTENTS
[01] High taxation of enterprises does not attract investments, says
Econ Minister Papadimitriou
[01] High taxation of enterprises does not attract investments, says
Econ Minister Papadimitriou
The three main conditions that Greece must fulfill to attract healthy
business investments are transparency in tenders' procedure, strong
state operation framework and financing from the banks, said Economy and
Development Minister Dimitris Papadimitriou in his article in Kathimerini
newspaper adding that the reduction of tax rates in enterprises in EU
countries did not bring investments.
In his article "Tax reduction and growth" underlined that in countries as
Finland, Slovenia and Spain where there was reduction of the tax rates
was observed reduction and in the investments. Reduction in investments
was also recorded in countries with low tax rates (Croatia, Poland, and
Romania)". On the contrary, in the most advanced economically countries
(Germany, France, Belgium, and Austria) despite the high tax rates
throughout the period of the crisis, there was not decline but small
rise of their investments to GDP.
Particularly in Greece in 2006 the businesses tax rate was 29 percent
and gradually fell to 20 percent in the period 2011-2012, this however
did not prevent the percentage of investments to GDP to drop from 23,7
percent in 2006 to 12,6 percent in 2012 which is indicative that no
reduction in businesses' taxation guarantees investments, he stressed.
The minister also referred to a recent OECD report in which, among others,
points out that "the tax burdening of a country is one of many, but not
the most important, factor that is examined by the potential investors
that weigh up their investing decisions. Very important for the potential
investors are matters related with the cost and the danger linked with
macroeconomic or business conditions, the cost of compliance with the
laws, the regulations and the administrative practices, the size of the
market, the labour conditions and above all the profit opportunities
linked with specific locations".
Concluding, Papadimitriou noted that firstly the reduction of enterprises
tax rates has a minor effect on the attraction of investments because it
also contributes in a competitive race downwards of the European economy
that only benefits the major multinational businesses. Secondly, for
Greece which offers a plethora of opportunities for profit from specific
locations (due to the infrastructures, tourism, energy and transport)
and is under huge fiscal pressure, the economy does not need this kind
of policy. What the country needs is transparent tender procedures,
strong state framework operation and financing from banks with economic
criteria because on these are based the healthy business investments.
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