ECONOMY

Rush to increase tax revenues

Meeting the budget targets is the government’s biggest worry, with the Economy Ministry aiming to cash in on 6 billion euros more in tax revenue in 2008. Deputy Finance Minister Antonis Bezas, whose area of competence is tax collection, will have to make significant efforts to activate the monitoring mechanisms that in the last few years seem to have become paralyzed, unable to meet their auditing tasks, mainly due to the lack of experienced employees. A significant role has been allocated to the new secretary of the Special Investigations Service (YEE), Spyros Kladas. He intends to change the way that YEE operates and, as he has stated, «will stop setting quantity targets on checks and focus instead on the key cases based on data cross-checked with the General Secretariat for Information Technology Systems.» In the coming months, changes in YEE will be massive, not only in the way checks are conducted but also in the people making them. It is quite possible that the ministry will this year change the heads of central tax offices, particularly those which in the last few years have not recorded any rise in revenues but have lagged behind the targets set. In mid-January, Bezas will begin meetings with tax office heads to inform them of the budget targets and ask them to activate the expired debts reception offices, sort out all pending cases related to value-added tax, complete cross-checking of VAT and other levies, immediately issue any decisions for fines from YEE reports, check enterprises suspected of forged and bogus data, while at least some people from each tax office should conduct checks on a daily basis. Expired debts reach -18 billion, -12 billion of which concerns various state companies or private firms that have gone bankrupt, so this money cannot be reclaimed. The remaining -6 billion – exactly how much the government is after – is owed by 750,000 taxpayers and companies. This year one of the most potent weapons in beating tax evasion will be used: This is the advanced system of electronic checks created last May by the General Secretariat for IT Systems and allows the ministry to know at all times every transaction by 800,000 companies and freelancers. The expectation of an additional -6 billion in tax revenues seems too optimistic without a corresponding VAT increase. When VAT went up by one percentage point in April 2005, some -1.6 billion flowed into the state coffers. The budget suggests that the rise in direct tax revenues will come from the introduction of the new property tax, with revenues rising from -240 million to -900 million.