Tax mech­a­nism chaos: Un­skilled of­fi­cials, con­tra­dic­tory cir­cu­lars

Kathimerini English - - Focus - BY PROKOPIS HATZINIKOLAOU

The con­stant pres­sure to in­crease state rev­enues and meet tar­gets, not to men­tion Greece’s con­fus­ing tax sys­tem, have cre­ated an ex­plo­sive sit­u­a­tion as some tax in­spec­tors have been im­pos­ing un­fair or ex­ces­sive fines in an ef­fort to max­i­mize the amounts they bring in.

Even the in­spec­tors them­selves speak of a chaotic sys­tem, with a mul­ti­tude of cir­cu­lars that in some cases have proven con­tra­dic­tory and led to un­just de­ci­sions. That in­jus­tice has come at a high cost for many en­ter­prises and tax­pay­ers, as they are of­ten un­able to con­tend with the state.

The sec­tor’s union­ists say the lack of struc­ture in tax ad­min­is­tra­tion cre­ates a con­fus­ing en­vi­ron­ment which is con­ducive to cor­rup­tion. At the same time in­spec­tors of­ten in­cur the wrath of those in­spected and some­times face le­gal pro­ceed­ings for the way they han­dle cases.

On the one hand the in­suf­fi­cient train­ing of in­spec­tors means tax­pay­ers some­times have to jump through hoops to prove they are not tax dodgers, while on the other tax of­fi­cials are of­ten left scratch­ing their heads as to how to han­dle a case due to con­tra­dic­tory cir­cu­lars.

Overzeal­ous in­spec­tors who im- pose ex­ces­sive fines to make their tar­gets have gen­er­ated a strong re­ac­tion from au­dit­ing firms, ac­count­ing com­pa­nies and en­ter­prises, and many be­lieve a large num­ber of the fines im­posed are too ar­bi­trary and in many cases un­fair. There have even been in­stances where in­spec­tions have gone back to years that would nor­mally be barred by the statute of lim­i­ta­tions.

Such is the ex­tent of the prob­lem that in the ma­jor­ity of the cases re­gard­ing ex­ces­sive or un­fair fines which have gone be­fore the ad­min­is­tra­tive courts, the en­ter­prises and tax­pay­ers have had their fines an­nulled.

In other cases the fines im­posed have been so high that busi­nesses were forced to close, as the own­ers were un­able to pay their dues to the tax author­i­ties. Fur­ther­more, re­fer­ral to ar­bi­tra­tion is not al­ways easy, even if it ap­pears so, as af­ter the ap­pli­ca­tion to the com­pe­tent com­mit­tee the tax author­i­ties pro­ceed to con­fis­ca­tions. For the tax­payer or the com­pany to avoid hav­ing their as­sets con­fis­cated they must pay 50 per­cent of the fine im­posed by the in­spec­tors, whether it is fair or not. Bring­ing a case to the ar­bi­tra­tion com­mit­tee may well be in vain, as five out of ev­ery six cases re­ferred are re­jected.

The in­suf­fi­cient train­ing of in­spec­tors means tax­pay­ers some­times have to jump through hoops to prove they are not tax dodgers in order to avoid hav­ing to pay hefty fines.

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