A move by Athens to impose a 26-percent withholding tax on transactions from sources in Bulgaria, Cyprus and Ireland could affect negatively the Greek economy, a Cyprus-Bulgaria business representative believes.

Xenios Xenopoulos, who heads the Cyprus-Bulgaria business association, told the Bulgarian National Radio on Saturday that the tax announced this week was likely to result in a number of entrepreneurs trying to go around the levy.

In his words, they might try to enter the grey economy and thus avert the strain in could put on their businesses.

Xenopolous also predicted the EU would not allow Greece to keep the new bill in force.

Bulgaria, where a flat 10% tax on corporate profit is in place (one of the EU's lowest), sent out a protest note to object against what it describes as a "discriminatory" decision of Athens.

Pierre Moscovici, the European Commissioner for Economic and Financial Affairs, Taxation and Customs, has not yet responded to the letter by Bulgarian Finance Minister Vladislav Goranov.

Greece is currently struggling to meet a deadline for new payments on its debts to international lenders, with the latest installment due on April 9. In the past months the government has desperately been looking to boost income fearing it might soon be unable to afford repayment and and civil sector salaries.

Athens however insists it will be able to collect the money.