EU, IMF ask Greece for more checks on tax evasion suspects

Greece’s creditors say that Athens needs to conduct more inspections on high-income self-employed groups (mainly doctors and lawyers), to strengthen the unit that monitors wealthy taxpayers and put into immediate operation an automatic system for debtor notification.

In their fifth evaluation of the Greek tax collection mechanism, which has been seen by Kathimerini, the International Monetary Fund and the European Commission are also asking for the unit set up for the collection of major debts to have administrative and legal powers that would allow it to approve debt repayment plans and to make on-the-spot visits to those taxpayers.

Two weeks before the next scheduled visit of representatives from Greece’s creditors in Athens for an inspection due to start on June 4, the report by the Commission and the IMF expresses concern about the sluggish pace of collection of fines and tax debts. However, the report also notes that the main indexes regarding the performance of the tax collection mechanism have shown significant improvement compared with previous years.

Specific reference is made to the progress made by the unit responsible for inspecting large companies, while the collection of new expired debts is also said to be close to the target set in the agreement between Athens and its creditors.

On the other hand, the performance of checks on wealthy taxpayers “remains weak,” although even in this category “the authorities are still fighting to secure satisfactory results.”

The IMF and the Commission argue that the new General Secretary for Public Revenues will need to hire 800 inspectors, while stressing with some disappointment that it will take more time to convince inspectors to use the real-time ELENXIS cross-checking system. They add that inspectors have been trained in order to begin extensive checks in the financial services sector, the construction market and the domain of intra-group transactions – yet just two inspections in the latter domain are currently under way.

The rather good marks creditors gave Athens on its tax mechanism improvement and the positive performance of the budget up to April have reduced the fronts that remain open between the government and the inspectors due to arrive next month, with a view to the disbursement of the next bailout tranches in the summer.

While the main inspection is expected in the fall, a Finance Ministry official told Kathimerini that if all goes well with the June negotiations the ministry will be able to proceed with the reduction of value-added tax on food service from as early as July 1.

The main fronts that are still open and will be the focus of talks with the troika of creditors next month concern energy, corruption and indebted households. The government has already presented its plan for the liberalization of the energy market through the split of Public Power Corporation and the sale of a part of it to private investors, allowing for cash flow to return to the market.

The Finance Ministry has also drafted a bill to combat corruption and the government is due in the next few days to appoint a national coordinator against corruption, as the agreement with its creditors clearly dictates.

The government is also waiting for the European Central Bank to approve a draft law Athens has prepared for the settlement of debts of over-indebted households so that it can be tabled in Parliament as soon as possible.