Tax measure offering selective exemption removed for relook

An article included in a mini tax reform bill that was submitted to Greek Parliament last week, exempting industrial enterprises relying entirely on natural gas for production purposes from a special consumption tax (EFK) imposed on natural gas, has been withdrawn for further processing following the negative reaction it prompted in the industrial sector, which argued the article provides selective favorable treatment.

The article, as it stood, essentially focused on Phosphoric Fertilizers Industry (PFI), Greece’s largest chemical company, making it the basic beneficiary. PFI produces ammonium nitrate, a process for which the chemical company consumes considerable amounts of natural gas, representing 90 percent of the final product’s total cost.

Yesterday afternoon, during a parliamentary session on the mini tax reform bill, Alternate Finance Minister Nadia Valavani withdrew the article in question. In doing so, she noted that the measure, valued at 25 million euros per year, was too costly for the Greek state’s coffers to not include more beneficiaries, especially enterprises having trouble meeting salary, social security fund, and gas bill payments. Valavani said the article requires more work but would return to parliament as part of another bill.

Following the heated response from industrial sector officials, the Finance Ministry and Production Reconstruction, Environment and Energy Ministry both denied being responsible for the measure. According to sources, the Minister of State was behind the tax-relief measure, whose team had assured the energy minister it would apply to a large number of industrial enterprises before the article was endorsed by Panagiotis Lafazanis, the energy minister.