Greek parliament approves tax change under rescue terms

ATHENS (AFP) - Greece's parliament early Saturday approved a new tax bill, part of the latest batch of fiscal reforms tied to the country's next slice of EU loans.

The legislation, criticized by the opposition as another serious blow to middle-class incomes in the midst of a recession, was supported by 162 deputies from the governing three-party coalition in a vote held after midnight in the 300-strong parliament.

The latest reform, the first part of a larger 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.

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

European Union leaders last month agreed to hand out 49.1 billion euros 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.