MPs block fiscal council nominees

Members of the House Finance Committee seem to have severe reservations about the appointment of the 3-member Fiscal Council, an independent oversight body that will supervise fiscal planning and expenditure.

If the Council members are not approved by June 5, parliament could jeopardise the fifth tranche of Troika aid, estimated at EUR 600 mln, by early July.

Committee chairman Nicholas Papadopoulos (DIKO) said that the law does not mention approval by his committee or by parliament, but by consultation with the Ministry of Finance.

“Some members have expressed concerns and we expect the Ministry of Finance, the executive and the Council of Ministers to take these views seriously into consideration,” Papadopoulos said.

The issue was debated behind closed doors in the presence of Finance Ministry Undersecretary Christos Patsalides and other government officials.

MP Prodhromos Prodhromou (DISY) defended the provision for consultation between the government and parliament, adding that “some comments have been heard, they will be conveyed to the Minister (of Finance) and the Council of Ministers and they will take a final decision, because it is the government’s responsibility.”

Nicos Nicolaides (EDEK) said that the law stipulated consultation, which means that as regards the legislation and ethically the government should take the concerns into consideration as it has the final say and responsibility for the appointments.

The three members of the Fiscal Council, appointed by the Cabinet on April 9, are Demetris Georghiades (economist and columnist in Politis), Marios Zachariades and Alkis Loizides. The Council is expected to get down to work immediately as the state budget for 2015 is expected to be drafted over the next few months.

The Troika of international lenders had demanded the creation of such a body in order to oversee budget and fiscal compliance. The chairman will have a six-year term and the other two members, a five-year and four-year term each, to be decided by draw.

Greens’ MP Yiorgos Perdikis said that he opposed all three appointments, as well as the creation of the Fiscal Council, for the way it was imposed on parliament and the government’s disregard of the House in this matter.

Meanwhile, the House Finance Committee pledged that it plans to implement all prior actions required for the disbursement of the fifth bailout tranche, based on a document sent by the Finance Ministry.

According to the document, by June 5, parliament must approve the establishment and operation of the Fiscal Council and pass a bill providing for the merger of the existing Inland Revenue Department and the VAT Service into one department.

By June 19, the House is expected to vote on a bill that makes not paying withholding taxes a criminal offence and tax fraud is prosecuted as a criminal offence. It is also expected to enact the necessary legislation to establish self-assessment for all income taxpayers by changing from a pre-assessment verification of income tax returns to post-assessment audits selected on the basis of risk and pass a legislation aimed at strengthening powers by the tax authorities to ensure payment of outstanding tax obligations, including providing the executive power to seize assets or prohibit the alienation or use of assets, including property and bank accounts, by the taxpayer.

Parliament should also, by the end of June, enhance the effectiveness of competition law enforcement by adopting the necessary amendments antitrust.

Finally, the government is expected, among others, to table in Parliament a bill to reform immovable property tax and another one introducing the Guaranteed Minimum Income.

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