FinMIn Tsakalotos: It is possible to achieve an agreement on the country’s first program review by March 25

It is possible to achieve an agreement with Greece’s creditors on the country’s first program review by March 25, a finance ministry official said on Sunday, following a meeting between the government’s economic team and the heads of the institutions.

According to the official, the two sides have the same target on the revenues expected from reforms in taxation, but disagree on the details. Greece submitted a counterproposal to the creditors’ request to lower the indirect tax-free threshold from 9,545 euros to 7,000 euros, which is being examined by technical teams. “We don’t want to lower the tax-free threshold, but if it is lowered by 100-200 euros it will be a success,” the official said.

At the same time, the government wants to increase taxes for incomes of around 30,000 euros, while the institutions want to lower it, while the self-employed will be included in the tax scales of the employees and pensioners, but without a tax-free threshold. The government is hoping to avoid taxing farmers with 20 pct tax rates for 2016 and 26 pct for 2017.

Incomes from rents will be taxed according to the agreement signed in August which foresees an increase to 15 pct from 11 pct for incomes up to 12,000 and to 35 pct from 33 pct for over 12,000 euros. The government has proposed a tax rate of 40 pct for incomes over 45,000euros. There will also be a separate tax rate for the solidarity tax which will reach a maximum of 10 pct.

Concerning the fiscal gap, the European Commission and the IMF have set an indicative target, although they still disagree on the issue. Greece believes that, apart from the social security and tax reforms, the undecided measures for the period up to 2018 total less than 1 pct of GDP. The two sides also disagree on the macroeconomic scenario, the official said.