Tax mechanism chaos: Unskilled officials, contradictory circulars
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.