New blueprint takes aim at tax evasion
Gov’t sees revenues of 11.8 billion euros
Finance Minister Giorgos Papaconstantinou announced a set of measures yesterday to combat tax evasion, render the tax authorities more efficient and collect 11.8 billion euros by 2013, while promising to publish lists of tax evaders.
With tax evasion estimated at about 25 to 35 percent of Greece’s gross domestic product, as the finance minister reiterated, containing the phenomenon has always been a target for all governments, and quite an elusive one at that. The ministry is aiming at 1.5 billion euros in extra revenues this year, 4.4 billion in 2012 and 5.9 billion in 2013.
Speaking at a press conference in Athens, Papaconstantinou announced a three-year plan that provides for the opening of taxpayers’ bank accounts, particularly those with deposits abroad, and the monitoring of the origin of the money deposited. Already, there are ongoing negotiations with Switzerland for Greece to receive a list of major deposits by Greeks in Swiss banks.
The plan further dictates the new role of the financial police, who will conduct more targeted checks and refer to the Citizens’ Protection Ministry, just like the main police force. The court processing of cases will be accelerated to avoid the delays seen nowadays. The new head of the tax collection mechanism is Ioannis Diotis, the prosecutor who rose to prominence during the November 17 terrorism case.
Many tax offices will be merged, which the government thinks will make the mechanism more flexible, although this may mean even longer queues for taxpayers. The plan is to have only one tax office per prefecture.
The government is hoping to reap 4 billion euros by 2013 by upgrading monitoring mechanisms such as the financial police, and 5.2 billion euros from the improvement of debt collection mechanisms, such as abolishing all tax exemptions for tax dodgers. In addition, they will be unable to benefit from measures such as the recent tax amnesty for the self-employed.
Papaconstantinou also warned that his ministry will publish lists of taxpayers with significant arrears to the tax authorities. “The Finance Ministry will publish the names of those who have tax debts before the three-month deadline provided by the law,” the minister stated.
The measure concerns debts in excess of 150,000 euros which have been overdue for more than one year.
The minister further announced that in about a month and a half, the “receipts smartcard” will be ready for use, relieving taxpayers of the obligation to collect paper receipts for their expenditure. The ministry is planning an online system connecting all retail outlets via their cash registers with the General Secretariat for Information Systems.
The market’s first reaction to the measures was quite negative. The head of the Athens Chamber of Commerce and Industry, Constantinos Michalos, branded the measures “a utopia,” stressing that the state does not fulfill its own obliga- tions. “Unfortunately the government continues to ignore reality and seems unable to adapt to its own view and actions,” his statement read. He added that “the government is the one with the biggest debt to the private sector, and therefore it cannot persuade anyone about its good intentions or create an atmosphere of trust.” The new measures only have a policing character and thus cannot bear fruit, Michalos argued.
Finance Minister Giorgos Papaconstantinou speaks at a press conference in Athens yesterday flanked by Regional Development and Competitiveness Minister Michalis Chrysochoidis (left) and Justice Minister Haris Kastanidis.