Greece submitted on Thursday to its eurozone creditors a new bailout plan proposing a pensions overhaul and tax hikes in return for debt relief and a three-year rescue loan.
Lawmakers in Greece will now vote whether to back a last-ditch reform plan the government submitted to creditors overnight in a bid to stave off financial collapse and exit from the eurozone.
The offer, set out in a 13-page document, concedes to Greece's paymasters on several key points that Tsipras's ruling coalition -- and the Greek voters, in a referendum last weekend -- had previously fiercely opposed.
The plan submitted to Athens's international creditors -- the European Commission, the European Central Bank and the International Monetary Fund -- will also be studied by eurozone ministers on Saturday before a make-or-break summit of all 28 European Union leaders the following day.
The document lays out proposals similar to those put forward by Greece's creditors on June 26 that Athens had initially rejected and put to a public referendum.
Greece crisis can be a valuable political lesson for India
Sales tax reform
Greece has proposed reforming its Value Added Tax (VAT) regime -- a key bone of contention in the talks -- in the hope of raising revenues by 1.0% of gross domestic product (GDP).
The new regime would unify rates at a standard 23%, including for restaurants and caterers which currently enjoy 13%. Basics such as food, energy and water will remain at 13%, while the rate will be fixed at six percent for medical supplies, books and theatre.
Abolish island tax breaks
The government has proposed reducing financial advantages offered to Greece's islands, including abolishing a 30 percent VAT break in place for several years. This would start on the wealthiest islands in October and those most popular with tourists, and be completed by the end of 2016.
Raise other taxes
Corporate tax would be raised from 26% currently to 28% -- meeting the demands of Greece's creditors but below the 29% initially put forward by Athens. Taxes on luxury items would also be raised and a tax on television adverts would be introduced.
The age of retirement would be fixed at 67, or 62 for people who have made 40 years of contributions by 2022. Athens said it would also "create strong disincentives to early retirement" including adjusting early retirement penalties.
Cuts to military spending
Athens is offering to cut 100 million euros ($122 million) from its military budget this year and 200 million euros in 2016 by reducing headcount and procurement. Creditors had asked for a 400-million-euro reduction.
The Greek government has put forward measures to clamp down on tax evasion, a huge problem in Greece, and to streamline its tax collection systems.
Consultants will be brought in to assess civil servants and a series of measures are planned to modernise the public sector.
The Greek government plans to sell the state's remaining shares in Greek telecoms giant OTE and commit to privatising the ports of Piraeus and Thessaloniki no later than October.
Athens had initially agreed with its creditors' demands to cut its primary surplus to one percent of GDP this year, followed by 2.0% in 2016 and 3.0% in 2017. But on Thursday Greece indicated these targets would need to be re-examined in light of the dire economic conditions gripping the country, including the impact of capital controls and the shutdown of the banking system.
Greece has also promised to rein in its public debt, currently 180 percent of GDP, according to a government source who gave no further details on the thorny topic.
A package of 35 billion euros to help boost Greece's economic growth has already been put on the table by the European Commission, according to a Greek government source.