An unnamed source has said that the plan could save the country as much as $6.5 billion, Bloomberg reported.
Prime minister George Papandreo stated that an announcement confirming the proposals will be made following a meeting of the countryâs cabinet.
Greeceâs debt management agency is also planning on launching a bond issue to raise up to â¬5 billion although the organisationâs new head, Petros Christodoulou, stated that this would only occur once market conditions are more âfavourableâ.
The bond issue is expected to come within days of the unveiling of the deficit cutting strategy to ensure Greece receives the best possible price for the sale of its debt.
Additional taxes on luxury goods, tobacco and alcohol are expected to be introduced while cuts will be made to salaries of public sector workers to reduce the governmentâs financial outlay.
Official statistics revealed that Greeceâs deficit reached 12.7 per cent of gross domestic product during last year, a figure four times higher than the limit recommended by the European Union.
By Jim Ottewill