There has been a lot of talk in recent days about taxation and investment. The main arguments of N.D. – we are ignoring here the scams that circulate today from the same circles – is, firstly, that the reduction in the tax rate on income from shares, i.e. . The simple explanation is that businesses were simply holding on to profits, waiting for tax cuts to distribute them, rather than investing.

Secondly, the slight increase in share income above €50,000 is due to small shareholders, etc. Suffice it to say that for someone to earn this amount of dividend income today, their shares are worth at least €1,500,000 euro, you can’t even call it a small and medium-sized company, although N.D. has a really peculiar view of what constitutes the middle class. With regard to parental benefits, for example, small and medium-sized families are those families that own real estate up to almost 5,000,000 euros.

Having the opportunity to recall that the Pissarides report, which was the strategic text of the economic policy of the failed government, as it is explicitly and repeatedly mentioned in the National Recovery Fund Plan (Greece Plan 2.0), defines it as a key fiscal policy measure. “Integration of income on a single scale of taxation, regardless of the source.” That is, the taxation of dividends, rents, etc. over 40,000 euros at a rate of 44%.

Third, even a small increase in the taxation of equity income will reduce investment from its record levels, and foreign investors will not come to the country. The sum of income and dividend tax rates in our country is 27%, which is the lowest in almost Europe after Bulgaria, Latvia and Estonia. The highest are in Denmark (64%), Ireland (63.5%), France (62.4%) and Portugal (59.5%), which is comparable to our country. We have not paid attention to the fact that domestic and foreign investors from these countries have moved en masse to other countries like ours, or that their competitiveness has decreased. On the contrary, they have both higher taxation and higher competitiveness because they have clear enforceable rules and efficient institutions. Business activity is not an eternal “prank” between the state and business. According to the World Bank, in these countries, businesses do not wait an average of 1,711 days to resolve a dispute in civil court.

As Vassilis Rapanos recently noted at the Delphi conference, our country ranks 29th out of 38 OECD countries in terms of the attractiveness of its tax system.

To have an income of 50,000 euros from dividends, you need to have 1.5 million euros in shares.

Our tax system does not provide prospects for stability for future investors, given the existence of an outdated dispute resolution institution that needs immediate reform as it acts as a deterrent to foreign investment. Add here territorial planning, the land cadastre, the chaotic bureaucracy, the organization of state administration, and all those structural and substantive reforms that the failed government did not even dare to touch.

N.D. marks records in foreign investment, but these are mainly about real estate, which brings wealth to its former owners, brokers and notaries, but not development, and speculative fund transactions, which are often financed by loans from Greek banks. That is, with our national capital, foreigners gain control over our economy. “This is not called foreign investment, but speculative opportunism,” said K. Simitis. By contrast, investment in new manufacturing units fell 14% in 2021 amid the festivities, with the latest data released by the Financial Times showing an even bigger decline in 2022. Mergers and acquisitions – mostly in the real estate sector – have more than tripled.

In order to attract productive investments with high domestic value added – so that the trade deficit does not inflate at the slightest rise – and to create good jobs with decent wages, it is necessary first of all to have a plan for the development of the national economy, primary production, energy networks. and national production centers of sectors and technologies and integrated national supply chains, which have a comparative advantage and should be promoted as a priority through national and European funding. Take into account, among other things, the geographical restructuring of international production chains, the strategic geographical position of our country, as well as upcoming developments in the field of strengthening European industry. A development plan, significant reforms and strong institutions are exactly what is missing from the ND agenda.

Mr. Ilias Kikilias – Economist, Development Sector Secretary PASOK-Movement for Change.