Troika Notes Tax Administration's Weaknesses

Tax (Photo credit: 401(K) 2013)

Greece's tax administration is apparently weak in its battle against tax evasion and collecting overdue tax debt, a report by the International Monetary Fund (IMF) and the European Commission said this week. The report stated that there was a shortage of infrastructure, a large shortfall in personnel to conducting tax inspections and collecting overdue tax debt and a lack of incentives to mobilizing human resources.

At the same time it emphasized that tax departments such as tax inspection and overdue tax collection were understaffed, most inspectors working in tax agencies for large enterprises did not have their own desk and computer and surprisingly a wage for a new inspector was just at 700 Euros.

The report also noted that a tax inspection on 765 cases of large tax debtors confirmed an overdue tax debt of 16.4 billion Euros in 2012, but tax agencies collected a mere 80.53 million Euros, while the tax agency collected 1.099 billion Euros in overdue tax debt last year, from a target of 2.0 billion Euros.

The report said that a huge portion of overdue debt could not be collected as it was owed by enterprises which have bankrupted, while it recommended a strengthening of the responsibilities and independence of a public revenue secretary-general. Parallel to this it also said that stricter measures towards improving tax administration such as stricter penalties are needed.

Finally the report also pointed out that there was a severe problem in the delay of VAT returns due to time-consuming inspections in the sector.