Provisional draft, 9 April 2013
Contains sensitive information, not for further distribution. [NO ME EXTRAÑA]
FISCAL MEASURES WITH EFFECT IN 2013
Expenditure measures
I.9
Ensure a reduction in total outlays for social transfers by at least EUR 113 million through:
[¿PERO CÓMO TIENEN LOS HUEVOS DE EXIGIR CON ESAS PALABRAS LA REDUCCIÓN DE TRANSFERENCIAS SOCIALES, CUANDO LOS RICOS SON MÁS RICOS, Y LOS POBRES MÁS POBRES?]
- (a) the abolition of a number of redundant and overlapping schemes such as the mothers allowance, other family allowances and educational allowances; and [ALLOWANCE = SUBSIDIO]
(b) the abolition of supplementary allowances under public assistance, the abolition of the special grant and the streamlining of the Easter allowance for pensioners.
I.10 Ensure a reduction of at least EUR 29 million in the total outlays of allowances for employees in the public and broader public sector by:
- i. taxing pensionable allowances provided to senior government officials and employees (secretarial services, representation, and hospitality allowances) in the public and broader public sector;
ii. reducing the allowances provided to broader public sector employees and reducing all other allowances of broader public sector employees, government officials and hourly paid employees by 15%; and
iii. reducing the daily overseas subsistence allowance for business trips by 15%. Ensure a further reduction the subsistence allowance of the current allowance when lunch/dinner is offered by 50% (20% - 45% of overseas subsistence allowance instead of 40% - 90% currently paid).
I.11
Reduce certain benefits and privileges for state officials and senior government officials, in particular by: [PARA CALMAR AL PUEBLO]
- i) suspending the right to travel first/business class by state officials, senior government officials and employees with the exception of transatlantic travel. The right to business class travel shall be maintained for the President of the Republic of Cyprus and the President of the House of Representatives;
ii) abolishing the right to duty free vehicles for employed and retired senior public sector officials; and
iii) extending the wage freeze and temporary contribution on gross earnings to cover all state officials and permanent secretaries (129 individuals) for 2013-2016, including members of the House of Representatives. Include pensionable and tax-free allowances of these individuals in the calculation of their taxable income. Introduce a contribution of 6.8% on the pensionable earnings of these individuals.
I.12 Implement the following measures regarding the Government Pension Scheme (GEPS):
- i. freeze public sector pensions;
ii. increase the statutory retirement age by 2 years for the various categories of employees; increase the minimum age for entitlement to an unreduced pension (by 6 months per year) to be in line with the statutory retirement age; while preserving acquired rights, introduce an early retirement penalty of 0.5% per month of early retirement so as to make early retirement actuarially neutral;
iii. reduce preferential treatment of specific groups of employees, like members of the army and police force, in the occupational pension plans, in particular concerning the contribution to the lump-sum benefits;
iv. introduce a permanent contribution of 3% on pensionable earnings to Widows and Orphans Fund by state officials who are entitled to a pension and gratuity. Introduce a contribution of 6.8% on pensionable earnings by officials, who are entitled to a pension and gratuity but are not covered by the government's pension scheme or any other similar plan;
v. amend Article 37 of the Pensions Law to abolish the provision according to which, in the case of death of an employee, if the deceased had a wife/husband at the time of his/her retirement and thereafter he/she remarried, his/her last wife/husband is considered a widow/widower. With the abolition of this provision, the second wife/husband will not be considered a widow/widower and thus she/he will not be entitled to pension;
vi. increase the contribution rate on the pensionable earnings of the members of the Tax Tribunal Council and the Tender Review Authority from 3.4% to 6.8%; and
vii. the contributions to the Widows and Orphans Fund will no longer be reimbursable.
I.13 Implement further reform steps under the General Social Insurance Scheme by:
- i. actuarially reducing pension entitlements from the General Social Insurance Scheme by 0.5% per month for retirements earlier than the statutory retirement age at the latest from January 2013, in line with the planned increase in the minimum age for entitlement to an unreduced pension to reach 65 (by 6 months per year), between 2013 and 2016;
ii. freezing pensions under the Social Security Fund for the period 2013-2016;
iii. abolishing the increase of pensions for a working dependent spouse under the General Social Insurance Scheme at the latest from January 2013 onwards.
I.14 Reduce transfers by EUR 25 million from central government to state-owned enterprises and semi-public institutions.
I.15 Ensure a targeted reduction of budgetary appropriations for a series of semigovernmental organisations in the 2013 Budget Law, supported by well-defined activityreducing measures.
I.16 Implement a four-year plan as prepared by the Public Administration and Personnel Department aimed at the abolition of at least 1880 permanent posts over the period 2013-2016.
Revenue measures
I.17 Increase excise duties on tobacco products, in particular on fine-cut smoking tobacco, from EUR 60/kg to EUR 150/kg. Increase excise duties on cigarettes by EUR 0.20/per packet of 20 cigarettes.
I.18 Increase excise duties on beer by 25% from EUR 4.78 per hl to EUR 6.00 per hl per degree of pure alcohol of final product. Increase excise duties on ethyl alcohol from EUR 598.01 to EUR 956.82 per hl of pure alcohol.
I.19
Increase excise duties on energy, i.e., on oil products, by increasing tax rate on motor fuels (petrol and gasoil) by EUR 0.07.
I.20
Increase the standard VAT rate from 17% to 18%.
I.21 Introduce a tax of 20% on gains distributed to winners of betting by the Greek Organisation of Football Prognostics S.A. (OPAP) and the National Lottery for winnings of EUR 5,000 or more.
I.22 Abolish all exceptions currently in place for paying the annual company levy of EUR 350.
FISCAL MEASURES WITH EFFECT IN 2014
Expenditure measures
I.23
Ensure a reduction in total outlays for social transfers by a at least EUR 28.5 million to be achieved through streamlining and better targeting of child benefits and educational grants, and abolition of social cohesion benefits provided by the welfare services.
I.24
Implement a further reduction in emoluments of public and broader public sector employees and pensioners by a flat rate reduction of 3% on all wages. [ESTO YA NO ES CONGELACIÓN SALARIAL, SINO BAJADA DEL 3% A FUNCIONARIOS Y PENSIONISTAS.]
I.25
Introduce a fee on monthly transportation cards for the use of public transportation services by students and pensioners. [A TOMAR POR SACO DE NUEVO A LOS PENSIONISTAS Y A LOS ESTUDIANTES]
Revenue measures
I.26 Extend the application of the temporary contribution on gross earnings and pensions of public and private sector employees up to 31 December 2016 as follows: EUR 0 – 1,500: 0%; EUR 1,501 – 2,500: 2.5%; EUR 2,501 – 3,500: 3.0%; and > EUR 3,501 - : 3.5%.
I.27
Increase the standard VAT rate from 18% in 2013 to 19% in 2014.
I.28
Increase the reduced VAT rate from 8% to 9%.
I.29
Increase excise duties on energy, i.e., on oil products, by increasing the tax rate on motor fuels (petrol and gasoil) by EUR 0.05.
I.30 Increase the contributions, as of 1.1.2014, of salaried employees and employers to the GSIS by an additional 1 percentage point on pensionable earnings, i.e. 0.5 of a percentage point from employees and 0.5 of a percentage point from employers and 1 percentage point in the case of self-employed persons.