Peleg ‘Table 1. Gresee: Prior Actions ‘tions tobe taken in consultation with EC/ECB/IME staff 22015 supplementary budget and 2016-19 MITES AT reform Adopt effecive as of lly 2 2035 a supplementary 2015 budget andlé 2016-19 mec tee cal ates, supported by a sizabe and credible package of measures. The nw fal phi premised on a pimary surplus target ‘of 12.3, and 35 percent of GD in 2015, 016 2017 ané 2018. The package ncudes VAT reforms (12). other tox policy measures 13), persion reforms 1), public adminstation reforms US) reforms agaresing shoals in tox Collection enforcement (16), and other paramatic meatures a specie below, Adopt lgisation to reform the VAT syste that willbe eective = sul 1, 2015 The relorin wil target a net revenue gain o percent of GOP onan annual tas Yom waramerc chances. The new VAT system wil () uly the rates ata standard 23 percent rate ana 2 eau 11 Percent fale fr food, mecicnes and hotels i steaming exemptions ta byeaden the baevand is) ebminae discounts ineuding on sland. 5 Fiscal structoral measures Adopt legisotion to ‘dose possibities for inome tx aveldgrce eg. tighten the definition of farmer, ake measures to increase the corporate income taxin 2035 an require 100 percant advance payment for corporat income wel 8 'ngvial business income tab end-2026,elininate the preferential tax tretment of ares inthe income tax code, ase the slidanty sycherge: abolish sbsidies for heating 0 ae fr exis on ces oo formers. In ew of ry revision ofthe zal property values. cus the property ax ates if necessary to safeguard the 2025 and 2016 propery tax revenues at €265bilin and adlut the aerate minimum aersonal income taxation bminate he cross-border withholding taxintoduce by the instalments ac (aw XXKK/201S)and reverse the recent amnments 1 the ITC in the public administration at (lw X89K/2015) including the specs ‘wentment of agicultual income, op oustanding refoems on the codes on Income tax nd tax procedures itrduce& new Criminal Law on Tex Evasion end Fraud to amend the Special Penal Law 2523/1987 and any ater relevant legato, and Teolace Article 55,1 Land 2, ofthe TPC with view iter aia to modernize and broaden the definition of tax fraud and evasion to al tates; aboish all Code of Bo0k ane Recard fines. incuing those leved uncer law4. Pension reform 2523/1997 develop the tax framework for collective investment vehicles and their partidpants consistently with the ITC and inline with best practices in the EU. ‘+ adopt legislation to upgrade the oxganie budget law to: intraduce a framework for independediagencies: {ip phase out ex-ante audits ofthe Hellenic Court of Aucitors and account officers (ypolagas)() give GDFSS ‘exclusive financial service capacity and GAO powers te oversee public sectorfinances and (W) phase out fiscal ait offices by Janvary 2017 By September 2015, () simply the personal income tax credit schedule i) resign and integite into the ITC the solidarity surcharge for income of 2016 to more effectively achieve progressivty nthe income tax ster: (i) sue Ctcuar on fines 16 ensure the comprehensive and consistent rppligtion ofthe TRC: fv} and other remaining reforms 235 specified in 19 ofthe IMF Country Report No. 24/151, ‘On healthcare effective as of July , 2035, () re-establish fl INN prescription, without Biceptions, i) reduce asa fst sep the price of al of-patent drugs to 50 percent anc all generics to 325 peréent ofthe patent price, by repealing the grandfathering clause for mecicines already inthe market in 2022, and (il) view and mit the pices of ciagnostic tests to bring svuctural soending in ine with dla back targets and fv collec in the full the 2014 clawloeck for private clinics, diagnostics and pharmaceuticals, and extend thet 2018 lanback celings to 2016, Launch the Socal Welfare Review under the agrega cefme of reference with the technical assistance of the Word Bank 1 target savings of ¥s percent of GDP which can help finance a fiscally neutral gradual roll-out ofthe GMA in January 2016, The Authorities wil impléfent in illhe 2010 pension reform law (2863/2010), and implement in full or replace/ad)ust the sustainability factors for supplementary and lump-sum pensions from the 2012 reform with to be specifed by the authorities to achieve equivalent savings and take further steps ta improve the pension system, Effective Fah uly 2, 2015 the authorities will phase-in reforms that would deliver estimated permanent savings of 1 percent of GDP in 2015 and 1 percent of GDP ona fll year basis in 2016 and thereafter by adopting legislation to ‘+ este strong disincentives to eary retirement, including by adjusting early retirement penalties gradually {eliminate grandfathecng to statutory retirement age and early reticersent pathways, applicable far everybody retiring after June 30, 2015; (integrate into ETEA al supplementary pension funds that fll under the ESAQS definition of General Government and ensure that, starting January 1, 2015, all supplementary pension funds ae ony financed by ‘own contibutions;better target socal pensions by increasing OGA uninsured pension Phase out the solidarity grant (EKAS) for al pensioners by end-December 2016; lteeze manthly guaranteed contriautory persion imitsin nominal erm unt 2021; Brovide to people retiring after 30 June 2015 the basic, guarentee contibutonyand targeted peabions only atthe atainment ofthe statutory normal eiement age of curently 67 yrs increase the relatively [ow health contsibutions fox pensioners from 4% to6% on everagWand extend ibte supplementary pensions phase out sl state financed exemptions and harmonize contribution rules fo al pengion funds Wit the Structure of contributions ta KA fom £ July 2035, "Moreover, the authores wl legislate by September 2015 to take effect Fomanvary 1. 246 includes () specie {design and parametric improvements to establish a cose ingbatween cofiribuis 2nd bene: i) broaden and ‘maderrize the contribution and pension base forall self-employed, incliing by sulthing rom notional to actual income. subject o minimum required contribution rues revise and tationsze ell ferent systems of base {quaranted contibutory and targeted pension components, taking intaacebunt incentives to work and contribute; (i) ‘the main elements of» comprehensive SSF conslidtin, including ary reiaiing harmonisation of contribution and benefit payment les and procedures across @l funds, boli all sane charges financing pensions and ofset by reducing benefits or increasing contributions in specific funds to take effect ram to specify and iv} harmonize Penson benefit ules ofthe agricultural fund (OGA) with rest oft pension system ina pro rata manner, unless OGAis merged into other funds 5. Public Administration, Justice and Anti Corruption [Adopt legislation tor + reformithe unified wage grid, eectiveJaruary 1, 2016, eting the key parameters in a fscally netral manner ‘2nd Gonsstent with the greadwag® bil targets and with camprehersve application across the public sector, iflvcing decompressing the wage dstibution in both diections in connection with the sil, performance and responsi of tf. ign non-wage bantisuch os lave arrangements, per dams, travel allonances and pert, with best Practices in the EU, elective July, 2015, ‘establish within the new MTFS celings forthe wage bil and the level of pubic employment consistent with achieving the fica targets and ensuring a declining path ofthe wage bil relative to GOP unt 2019,‘+ reform the Ci Procedure Code in line wth arevious agreements: *+ pete and publish the National Ant-Cortugtion Plan: strengthen the governance of ELSTAT. It sal cover (the role and stuctare ofthe ABNisary bodies oF the Hellenic Statistical System, incusing the recasting ofthe Cau of F155 to ah advisory Commiiee ofthe LSS, a the role ofthe Good Practice Advisory Committee (BAC) fi) the rentment procedure for the President of ELSTAT, to ensure that a President ofthe highest rozsionalcalieisrecited, flowing \eansparent procedures and selection criteria i). the WWolvemen't of ELSTAT a: spprooriat in any legislative ‘or other legal proposal pertaining to any statistic! matter (ether cues tha impact the independence of ELSTAT, including nancial autonomy, the empowerment of LSTAT to reallocate existing permaner posts, and to hire staff where itis needed and rehire specials cient personnel, and the cassfcation ofthe institution asa fiscal policy body ine recent aw270/208¢ole and powers of Bank of Greece in statistics inne with European legislation, 6. Tax administration Adopt legislation to: ‘+ establish an auiongmous revenue agency, that spéeres (the agency’s legal form, organization, status, and cope (i) the powers an functions ofthe CEO and the independ Board of Governors: i the relationship to the Minister of Fnanee and other goverment entities: v) the agency's human resource fedisity and felationship tothe cul sere) budget autonomy, with own GDFS and a new funcing formula to align incentives with revenue colecionand guarantee budge preditabilty and flexi, (vi reporting tothe {government and parliament; ang i the immediate tanslr ofl taxrelated capacity and staff other nities including SOOE) to te agency. tehiminate the 25 percent cling and lowe the €1,500 garnishment limit an wages an! persons toa level ensuring feasorable ling conitions, and lower the €1,500 ganshment limit on bank deposit balances, accelerate ovocyyement of infrastructure to automatize e-ganishment: improve tax deb witeof rules [to especie; remove tax ofcers' personal lables fr net pursuing old debt remove restctions on ‘onductng aus of tax returns rom 2012 subject o the external tax cetificate scheme; and enforce legally possible upicont payment collection in tox disputes, amend) the 2014-15 tax and SSC debt instalment schemes to exclude those who fal to pay current ‘obligations and introduce a requirement for he tx and social security administration to shorten the ‘uation for those with the capacity to pay earlier and introduce maket-bazed interest ates the LDU and KEAO wil assess by September 2015 the large debtors wih ox and SSC debt exceeding EL milion (to be specie eg, vey ther capacity to pay and toke corrective octions) sn) the basic instalment echeme/TPC to adjust the market-based interes rates and suspend until end-20L7 thc party version and bank7. Financial sector 8. Labour market {guarantee requirements accelerate deregistration procedures and limit VAT Fe-registration to protect VAT revenues and accelerate procurement of network analysis software; and provide the Presicential Decree needed forthe significanty strengthening the reorganisation of the VAT enfaféement section in order to strengthen VAT enforcement and combat VAT carousel aud The authocties wil submit an application to the EU VAT Committee and prepare an assessment ofthe implication BF an increagé in the VAT theeshole to 25000, ‘Adopt: () amendments to the corporate and household insolvency laws including to cover all debtors and bring the corporate insolvency law inline with the OOWiaw (i! amendments to the household insolvency law to introduce @ ‘mechanism to separate strategic defauters from good faith debtors as wel as simply and strengthen the procedures {and introduce measures to adress the large backlog of cases; ii) amendments to improve immediately the judicial framework for corporate and household insolvency matters legislation to establish a regulated profession of insolvency administrators, nt restricted to/anyspecfic profession and in line with good cross-countyy experience; () a comprehensive strategy for the financial system: this strategy will buld on the strategy document from 2013, taking into account the new environment and conditions of the Financial system and with a view of returning the banks in private ownership by attracting international srategic investors and to achieve a sustainable funding model over the ‘medium term; and (i) a holistic NPL resolution strategy, prepared withthe help ofa strategie consultant. Launch @ consultation process similar to that foreseen forthe determination of the level ofthe minimum wage (Art 103 of Law 4172/2013) to review the existing frameworks of collective dismissals, industrial action, and collective bargaining taking into account best practices elsewhere in Europe. Further input to the review described above wil be provided by international organizations. The organization and timelines shall be drawn up in consultation withthe Institutions. No changes to the current collective bargaining framework will be made prior tothe conclusion of the review and in any case not before end-2015, Any proposed changes to the legislative frameworks will only be adopted inlagreement with the EC/ECBAM.Adopt legislation to: + implement all the pending recommendations of the OECD Competition toolkit, iieluding inter alia truck licenses, and the OECD toolkit fl recommendations on Beverages and pettoleum products ‘open restricted professions of engineers, notaries, aétuaties, and ballffs, and liberalize the market for tourist rentals and ferry transportation; + eliminate reciprocal and non-reciprocal nuisange charges: (0 reduce red tape, including on horizontal licensing Fequirements ofinvestments and on low-risk activities as recommended by the World Bank, and administrative burden of gompanies based on the OECD recommendations, and {i} establish @ committee for the nter-ministerial preparation of legislation. Technical assistance of the World Bank wlbe sought tomplement the easing of licensing requirements. ‘adopt the reform of the gas market and its specific roadmap, and implementation should follow suit, take irreversible steps (including announcement of date far submission of binding offers) to privatize the electricity transmission company, ADMIE (On electricity markets, thélaithorites wil reform the capacity payments system and other electricity market rules to ‘avoid that some plants are forced 10 operate below their variable cost, and to prevent the netting ofthe arrears between PPC and market operator set PPC tariffs based on costs, including replacement of the 20% discount for HV Users with cost based tarifis and notify NOME products to DG COMP. The authorities will also continue the implementation of the roadmap to the EU target model,10. Privatization ‘The Board of Directors ofthe Hellenic Republic Asset Development Fund will approve its Asset Development Plan which will include for privatisationdall the assets under HROAF as of 31/12/2014; and the Cabinet will endorse the plan To facilitate the completion of the'tenders the authorities will complete all government pending actions including those needed for the regional aitports, TRAINOSE, Egnata, the ports of Pireaus and Thessaloniki and Hellinikon (precise list in Techiniéal Mervarandurn). This list of actions is updated regularly and the Government will ensure'that all pending actionsiare timely implemented. The government and HRADF will announce binding bid dates for Piraeus and Thessaloniki ports of no later ‘than end-October 2015, and! for TRAINOSE ROSCO, with no material changes in the terms of the tendess. The government will transfer the'siate's shares in OTE to the HRADF and take irreversible steps for the sale of the regional airports at the current terms with the winning bidder already selected.