By Sotiris Nikas

Greece’s international creditors have sent a clear message to Athens: Either enhance the autonomy of the new General Secretariat of Revenues of the Finance Ministry or proceed to a new system that will be free of the state mechanism’s bad habits.

Even the troika of creditors – the European Commission, European Central Bank and the International Monetary Fund – have realized there is no room for more cuts, so the government will have to cash in the revenues that the old measures provide for collection. For that to happen, tax evasion and tax debts will have to be drastically reduced, the troika said in the context of the technical assistance it supplies to Athens. Debts to tax authorities add up to 56.6 billion euros, out of which 13.2 billion euros was created within 2012.

The purpose of establishing the General Secretariat for Revenues was to have a mechanism that would be free of the problems created by the state system and work autonomously toward the collection of revenues.

Experts from the Commission and the IMF arrived in Athens at the end of January to examine the work done in this direction and to propose changes of a technical nature so that the new secretariat could become more flexible and achieve its targets.

The report delivered to the Greek authorities notes that “the government’s proposals for the concession of more autonomy” to the agency “are not on the right track,” and adds that Athens must immediately lift the bureaucratic obstacles delaying the reform.

“The government will have to categorically renew its commitment for extensive institutional reforms in tax administration that will determine autonomy,” the report reads, adding that for that to happen, “it will take leaps” up until the end of February. It goes on to conclude that the government must clarify quickly “whether it has the capacity to do so under the existing organizational and legal status” and abandon the model of having the tax administration within the state mechanism. Instead, “a semi-autonomous agency of revenues must be installed through special legislation” and which will answer to the Finance Ministry.