IMF spots corruption

A report by International Monetary Fund (IMF) officials on Greece’s revenue collection processes advises stamping out corruption by tax officials, among other recommendations. The report was submitted yesterday afternoon to Economy and Finance Minister Giorgos Alogoskoufis after a two-week review of tax offices and other administration offices concerned with revenue collection. The major problem worrying the government is revenue collection, which is lagging well behind published targets and threatens to derail the 2005 budget, meaning that for 2006 will obviously contain much harsher measures to try to bring the deficit below 3 percent of Greece’s GDP, as demanded by the EU. The latest measure to boost revenues, increasing VAT rates from April 1, has apparently not worked as promised. The IMF group also made recommendations on tax evasion. The report’s main recommendations can be summarized as follows: – Much of the work in tax offices is counterproductive. This must change. – Clamp down on corruption and increase penalties. – Modernize tax office operations and introduce management systems that will prevent illegal transactions. – Improve services to the public. – Improve sample checks on enterprises to cover all business aspects. – Enact harsher laws against tax evasion and, more important, apply them. Commenting on the report, high-ranking Finance Ministry officials say that there are well-established corrupt mechanisms within tax offices, which operate beyond party affiliation barriers and which ensure lack of disclosure and continued profits. Officials said the state must stop trembling before every strike threat by tax officials.

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