Creditors blast Finance Ministry for tax and debt collection record

Greece’s tax collection and monitoring mechanisms are in complete disarray while the political administration is unable move ahead with their restructuring, according to a report by technical experts sent to Greece by the country’s international creditors.

The report, delivered to the government at the end of January, showed that tax inspections are falling short of their target, while in some cases the targets set are actually different to those provided for by the memorandum signed between Athens and its creditors.

On Wednesday Finance Minister Yannis Stournaras demanded explanations from his ministry’s agencies about the poor performance in terms of checks in 2012 and the first month of 2013.

The 106-point report notes that employees at key agencies such as the tax office for major enterprises do not even have their own desks or computers, while generally the agencies that are crucial in the battle against tax evasion are understaffed and devoid of inspectors. Overlaps between various agencies are also common, resulting in problems in combating tax evasion. Worse, the internal affairs department has found evidence that some 130 tax inspectors are among those who have foreign bank accounts.

The international experts note that they consider it unlikely that the targets for collecting expired debts will be met in 2013 without direct interventions and hirings. The number of employees who conduct tax collection has not grown and the central agency that monitors expired debts is understaffed: It has a staff of just eight people, including the department head.

The report adds that the ministry’s internal forecast for collection of previous years’ debts in 2013 amounts to 1.176 billion euros, against a memorandum commitment for 1.9 billion. Last year the amount of overdue debts collected came to 1.1 billion euros. The low level of collection is due to the fact that many debts are now seen to be non-collectible, as they concern bankrupt and liquidated companies and so on.

The experts call for the tax collection agencies to focus on major debts and to have their staff numbers boosted, along with the creation of an agency to focus exclusively on the 1,500 biggest debts and aim at the best possible collection results within 2013.

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