Troika concerned by lack of progress in overhauling tax collection

Troika concerned by lack of progress in overhauling tax collection

Visiting troika inspectors have expressed frustration over the delayed overhaul of Greece’s dysfunctional tax system, one of several pledges that authorities have made to international creditors in exchange for continued rescue funding, while European Commissioner for Taxation and Customs Union, Audit and Anti-Fraud Algirdas Semeta said on Tuesday a shake-up is sorely needed to boost revenue collection.

Technical staff representing the European Commission, European Central Bank and International Monetary Fund – Greece’s troika of foreign lenders – have reportedly been unpleasantly surprised by foot-dragging on actions aimed at improving revenue collection.

The ministerial decisions and circulars required to kick-start the overhaul have yet to be issued, the inspectors are said to have complained. Further, the planned absorption by the General Secretariat for Public Revenue of the Financial Crimes Squad (SDOE) and the General Secretariat for Information Systems (GSIS) – part of a broader streamlining program – has yet to be carried out and the recruitment of additional tax inspectors is also behind schedule.

The technical staff have reportedly pressed government officials to fulfill pledges to boost inspections on rich taxpayers, especially in fields where tax evasion is believed to be rife, with doctors and lawyers facing particular scrutiny.

In a speech before Parliament, the commissioner struck a similar note, referring to an unfair tax burden on salaried and low-income Greeks. He also poured cold water on requests for a reduction in the 23 percent value-added tax rate for restaurants and tavernas, noting that reducing VAT is not a proven way of boosting the economy.

The government is to raise the issue next week when troika mission chiefs are due back in Athens. Greek officials are also likely to ask for an extension to the deadline for laying off 2,000 civil servants by September.

Talks between the government and the troika are to focus on four areas – the overhaul of the tax collection system, a streamlining of the public administration, a financing gap for 2015 and 2016 and a program for privatizing state assets.


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