A few ideas for improving the tax collection system
By Haris Theoharis
It is a known fact that tax evasion is the most evident result of Greek mismanagement, because it encapsulates all of the typical problems: deficiencies in systems and processes, a tendency to focus on the trite and insignificant, missing the essentials and getting no results, corruption, indifference and mismanagement on the part of state workers, and anti-social behavior on the part of tax dodgers.
But things are not all that bad. While the above is all true, revenue inflows are being maintained by citizens who honestly declare their true income and wealth, while many employees are willing to go the extra mile to overcome the obstacles they encounter on a day-to-day basis to serve citizens.
At a recent conference, I made seven proposals for a more modern and effective tax collection system:
1. All declarations be submitted electronically. This year the General Secretariat for Information Systems increased the
number of electronic tax declarations submitted by 60 percent (the optimistic target was 4.2 million declarations and we managed to handle more than 4.4 million). While last year 5 million declarations were submitted manually, this year there were only 400,000.
2. All payments be made electronically. Tax offices would no longer handle cash or check payments, freeing up labor hours. This would also allow payments to be made when tax offices are closed, easily and safely.
3. Collecting and using data from third parties. The qualitative and quantitative data that comes from third parties is our greatest weapon. The General Secretariat for Information Systems has already set the technical groundwork for exchanging information with banks, insurance companies, utilities etc.
4. Categorization. Clear distinction of responsibilities in three categories: Type of activity/violation (illegal trade in fuel, multinational companies, start-ups etc), scale (for big taxpayers and debtors) and settlements (payment schedules, debt reminders, new debts etc). This system would allow simple and clear targets, oversight and coordination.
5. Rationalizing services. The way that tax offices render services needs improvement. The aim is to have a taxpayer service center in every municipality for hands-on assistance. At the same time, auditing and other services not requiring face-to-face contact can be handled by at most three offices around the country.
6. Simplification. Changes need to be made at every stage of every procedure with the tax authorities. For example, informing taxpayers electronically of any pending issues (currently, a presidential decree has given jurisdiction for all correspondence to go through the post office), eradicating different submission deadlines for different taxes, independent, reliable and swift arbitration, speedy confiscations and the establishment of fewer and simpler rules.
7. Other changes. For the above to work, a number of steps need to be taken. Cash tills connected to a central system to reduce field inspections, ad hoc cross-referencing in the context of audits conducted by the Elenxis system, new tax legislation for a simplified operation framework and a tax revenue service that is completely independent so that any suspicion that it is influenced by political or other interests can be laid to rest.
We have outlined the requisite reforms, but there are certain conditions that need to be met which require political decisions:
- Changing the way services are provided so that the goal is always toward the improvement of taxpayer services.
- Complete monitoring so that there are incentives to increase efficiency, as well as accountability.
- Swift and transparent supply/procurement procedures.
- Salaries pegged to targets and productivity, and staff evaluations to encourage efficiency and hard work. All this can be achieved through will power, determination and work.
Haris Theoharis is general secretary for information systems at the Ministry of Finance.