Greek parliament approves tax increases Greece's parliament approved fresh tax reforms early on Saturday after a noisy session in which opposition lawmakers claimed the coalition government had "hijacked the democratic process." Yannis Stournaras, the technocratic finance minister, defended the adoption of emergency parliamentary procedures to push through measures on grounds that international creditors" deadlines for handing out €14.7bn of aid by March were fast approaching. The reforms had to be legislated ahead of Monday's regular meeting of economic experts from the eurozone member states and Wednesday's board meeting of the International Monetary Fund to approve a €3bn loan disbursement to Athens, he said. Parliamentary approval of the tax measures, together with an immediate increase in household electricity prices, are key conditions for Athens to receive the next aid tranche. The state electricity monopoly PPC is set to announce a 10 per cent tariff rise on Monday, the first of three this year. People have made sacrifices, but they are proving worthwhile . . . The economy is responding," Mr Stournaras told parliament, referring to a better than expected budget performance in 2012 and a shrinking current account balance. "Unfortunately, the opposition [parties] have failed to make any constructive economic policy proposals," he said amid shouts of "sellout" by lawmakers from the main opposition, Syriza. Greece last month received a much-delayed €31.5bn aid package to recapitalise its major banks and begin catching up with payments to government suppliers currently owed almost €10bn. The tax reforms are aimed at raising an extra €2.5bn of revenues this year, equivalent to 1.25 per cent of national output, despite continuing recession. The economy is forecast to contract by another 4.5 per cent in 2013 on top of a projected 6.5 per cent last year. The new measures will squeeze middle-class taxpayers by eliminating tax exemptions for insurance premiums and interest on mortgage payments, raising annual property taxes and introducing a 20 per cent capital gains tax from July on trading in the Athens stock market. Interest income on bank deposits will be taxed at 15 per cent instead of 10 per cent. According to a new streamlined system worked out with the help of IMF experts, salary earners and pensioners with annual incomes up to €25,000 will be taxed at 22 per cent, while the top income tax rate on incomes above €40,000 is set at 42 per cent. But taxpayers who fail to collect invoices matching 25 per cent of their declared income will have to pay an extra 22 per cent on their initial tax assessment under a renewed drive by the finance ministry to reduce tax evasion. The corporate tax rate will rise from 20 per cent to 26 per cent but tax on distributed dividends will be cut from 25 per cent to 10 per cent.