Greece approves new tax hikes

The Greek parliament has approved a series of unpopular tax hikes to increase government income, one of the main conditions to qualify for continued aid from its foreign lenders.

In a sitting that ran into the early hours of Saturday, a comfortable majority of lawmakers voted for the legislation, which the opposition said was another assault on Greece's struggling middle class.

On key articles of the bill, 163 of parliament's 300 members voted in favour.

The legislation scraps many tax exemptions, raises tax rates on property and corporate profits, and slaps a capital gains tax on share sales, in the hope of generating about 2.5 billion euros of additional revenue in 2013 and 2014.

The measures, approved overnight, introduce a new top tax rate of 42% for Greeks earning more than 42,000 euros a year.

Corporate rates also go up and the tax base now includes low-earning farmers.

Greece has been kept solvent by huge rescue loans from its EU partners and the IMF since May 2010.

The Conservative-led government insists the new measures, designed to raise up to 2.3bn euros this year, are fair.

"We are not in favour of taxes," Deputy Finance Minister Giorgos Mavraganis said. "But in the current situation we must lead the country out of its impasse."

The changes are part of an overall package approved in November to allow Greece to qualify for further bailout funds.

But the opposition say the tax rises will increase hardship for ordinary Greeks. The main opposition Radical Left Coalition says austerity has "demolished the country's middle classes".

Deep spending cuts and job losses have triggered street unrest across Greece in recent years.