On Tuesday, the Greek finance ministry announced it would be “improving operation and transparency in tax administration”, because, as they put it (with some understatement), there’s a “need to improve tax collection mechanisms.”
Here’s the statement in full, emphasis ours:
Replacement of directors in tax offices: The Finance Ministry is replacing 20 directors under whose supervision various tax offices throughout Greece failed to meet tax collection targets.
Relocation of employees: Seventy financial agency employees across Greece are being relocated from their current posts to new positions so as to improve the functioning, but also strengthen tax collecting and auditing practices.
Initiation of an internal inquiry: Τhe Finance Ministry is launching an internal inquiry that will investigate 50 anonymous and named complaints brought against employees of 31 Tax offices, 10 customs agencies, and a number of financial agencies throughout the country. The internal inquiry concerns cases of bribery, illegal economic activity, forged documentation, smuggling, negligence and corruption among other allegations.
Investigation of Finance Ministry employees financial standing: The Finance Ministry is investigating 234 employees who have not filed taxes for 2007-2008, as well as others selected based on sampling criteria.
Crosschecking declared income and real estate holdings of Finance Ministry employees: Crosschecking income statements and real estate holdings will also serve as a basis to discover possible discrepancies in tax and income statements. According to a preliminary investigation, 70 Finance Ministry employees have real estate holdings ranging from 800,000 to 3 million euro in value. The average real estate holdings for these employees is valued at 1,228,337 euro, while their average declared income is 50,834 euro. The Finance Ministry is launching investigations into all these cases.
Restoring transparency in tax collection, as well as the reputation of the tax administration in general is essential not only for improving public revenues but also in order to instill a sense of social justice and establish a trustworthy relationship between citizens and the state.
This project’s success rests on the hard work of the tax employees but also on the public’s participation and cooperation. For this reason, the Ministry has established a public hot-line (1517), where citizens can report suspected tax evasion and other financial crimes.
Beyond the measures announced above, the Finance Ministry is moving towards a complete reorganization of tax collection mechanisms. The goal is to bring up to date the mechanism of tax collection, better serve citizens, and establish a transparent and fair tax framework.
The IMF is likely to be keeping a close eye on proceedings. The body has stressed to Greece that it must take steps to address structural weaknesses in tax compliance and punish big tax dodgers, according to a Reuters report in April.
We wish them luck.
Related links:
No tax please, we’re Greek – BBC
To loud applause… – FT Alphaville
The Tax System in Greece – Certh
Greece’s Hat Trick: Tax Collection – Forbes