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Greece says ATM levy, bank transaction tax no longer being discussed

ATHENS (Reuters) - Greece's finance ministry said on Tuesday that it was no longer discussing with its European Union and International Monetary Fund creditors a banking transactions tax and a levy on ATM withdrawals, just hours after the finance minister had said such a proposal was on the table. The reason for the contradictory statements was not immediately clear. The ministry said that it disagreed with the measure because it failed to sufficiently discourage use of cash rather than credit for transactions. "The proposal ... was withdrawn from the negotiations after the ministry's reaction," the finance ministry said in a statement. Earlier on Tuesday, Finance Minister Yanis Varoufakis told reporters a fee on withdrawals from automated teller machines was being discussed, as an incentive to use web banking and credit cards, although he said no decision had been made. He categorically ruled out any tax on bank deposits. He also said Athens is in talks with Swiss authorities on a plan to offer taxpayers with deposits abroad the chance to voluntarily declare them, pay taxes and avoid stiffer sanctions. Under the so-called voluntary disclosure agreement, Greeks with previously unreported income in Swiss banks would be able to disclose it by paying a potential tax of 15 percent. "At a very low tax rate, say 5 percent, there is a moral issue of legalizing tax evasion. At a high rate of say 30 percent, there is a risk that these deposits may flee to the Caymann islands or to other tax havens," Varoufakis said. He said Swiss authorities might not agree to a deal with a high tax rate if they think the money would flee its banks. Deliberations are continuing. "We studied the tax rates of other countries, Italy's for example, and proposed a rate of 15 percent. It is open for deliberation, the issue is still open," Varoufakis said. Greece is not intent on having the money repatriated but wants to tax it to relieve its cash squeeze. Savers with undeclared incomes deposited in Greek banks would have the same chance, but possibly face a higher 30 percent rate, the minister said. "We do not believe in the process of repatriation," Varoufakis said. "What interests us is to legalize (these deposits)." Greeks have sent billions of euros abroad since the debt crisis exploded in 2010, fearing the country may crash out of the euro zone. The deposit flight has strained its banks, which have become dependent on central bank funding for liquidity. A portion of this money has fled to Swiss banks. Depositors who have evaded reporting incomes would otherwise face a 46 percent tax rate and 46 percent in penalties if caught. (Reporting by Lefteris Papadimas and George Georgiopoulos; Editing by Larry King)