Greece's conservative government said Thursday it would hike taxes on tobacco and alcohol to compensate for easing taxation on the self-employed.
Economy Minister Yiannis Papathanassiou said the cigarette tax would increase from 75 to 80 per cent and the tax on alcoholic drinks, excluding wine, would increase by 20 per cent.
The ministry has reversed a decision to abolish a EUR 10,500, tax-free income limit for self-employed people.
Last week, the ministry scaled down Greece's 2009 growth forecast to 1.1 percent from 2.7 percent as a result of the global crisis and said budget deficits would exceed EU limits for the next two years. Papathanassiou said the government would cut spending and slash hiring in most of the public sector apart from health and education in an effort to restrain the deficit, which is expected to have reached 3.7 percent in 2008, compared with the budget forecast of 2.5 percent.
Greeks are among the heaviest smokers in the European Union. (pi)