Greek parliament to approve tax change under rescue terms

(ATHENS) - Greece's parliament was expected late on Friday to approve a new tax bill, part of the latest batch of fiscal reforms tied to the country's next slice of EU loans.

The latest tax bill, the first part of a broader overhaul expected in April, broadens the tax base in the hope of increasing state revenue by about 2.5 billion euros ($3.3 billion) this year.

It introduces new annual income thresholds for salaried taxpayers and scraps tax breaks for the self-employed, a class blamed for a large part of the tax evasion that has plagued state finances for decades.

The conservative-led coalition government has been hit with several defections in the past few weeks in opposition to the continued austerity wave.

It lost another deputy on Thursday, but can still muster 163 out of 300 votes in parliament, more than enough to assure approval of the bill.

"These measures are tough, but they will assist us to complete the adjustment phase," deputy finance minister George Mavraganis told the chamber.

Finance Minister Yannis Stournaras has said the bill must be voted this week ahead of a meeting by European finance ministers that will determine the disbursement of Greece's next loan instalment.

"We must be ready, we must vote the tax bill by (January 11), it is the most important issue," Stournaras told reporters last week.

European Union leaders last month agreed to hand out 49.1 billion euros ($63.9 billion) in aid in return for more austerity measures.

Athens has already received 34.3 billion euros of this package and is poised to get another 9.2 billion euros at the end of this month if key fiscal reforms are carried out, followed by two more slices of 2.8 billion euros in February and March.

The meeting by European finance ministers is expected on January 21.

The International Monetary Fund, which is participating in Greece's rescue, is also expected to decide this month whether to release its next share of the bailout, worth an additional 3.4 billion euros.