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Greece Berated For Feeble Tax Evasion Fight-Back

by Ulrika Lomas,, Brussels

31 December 2012

A new report from the International Monetary Fund (IMF) and the European Union (EU) has condemned Greek authorities' apathetic approach to tackling the nation's low tax compliance rate.

The report highlights the fact that despite continued pressure from international lending institutions and eurozone members, Greek authorities have achieved just half of the quantitive objectives placed on them in relation to tackling delinquent taxpayers, both in terms of increasing auditing activity and chasing outstanding tax balances.

The IMF estimates that Greek taxpayers owe around EUR53bn (USD70bn) in unpaid tax, around a quarter of the country's gross domestic product. However, the report suggests that 15-20% of this figure could be collected if the government intensified its efforts to collect more back taxes.

Debt collection efforts by the nation's tax authority yielded just EUR1.1bn in revenues against a full-year target of EUR2bn.

Greece has been told to take a more targeted approach to tackling evasion, by focusing enforcement efforts on specific professions prone to avoidance, such as the medical and legal professionals; large companies; and wealthy individuals. The report said that of 1,100 high-net worth individuals that were supposedly to be subject to scrutiny this year, just a third of cases were examined.

In light of the government's shortcomings, the report suggests the adoption of radical tax collection methods such as automatically deducting tax dues from taxpayers' bank accounts.

TAGS: individuals | compliance | tax | business | tax compliance | fiscal policy | law | International Monetary Fund (IMF) | audit | enforcement | tax authority | Greece | European Union (EU) | Europe

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