Revenues slip on costly delays

Athens’s inability to collect state revenues is becoming one of its economic policy’s weakest points, as income for 2010 looks set to fall short of the annual target by more than 1 billion euros. The government’s delay in appointing a deputy finance minister to head revenue collection services is believed to have partially contributed to state revenues falling short of the mark. Even though problems had been spotted at the beginning of the year, nothing was done to improve the situation by the country’s political leaders, who only decided to take action during the recent Cabinet reshuffle. Nine months were lost as the government struggled to collect income. After September’s reshuffle, Prime Minister George Papandreou gave Deputy Finance Minister Dimitris Kouselas the task of jolting revenue collection back into action. The drop in budget income is also due to government delays in appointing heads to tax offices for most of 2010. Recent legislative changes introduced by the ruling Socialists contributed to this delay. Finance Ministry sources believe that foot-dragging by the government in providing senior staff positions at the tax offices, along with staff cuts implemented as part of state spending cuts, have also resulted in the current backlog of 200,000 yet-to-be-processed tax returns. At the same time, a number of tax office employees launched go-slow action in order to protest against the government’s decision to slash their benefits. Additionally, the government failed to reorganize the tax offices during the year, further worsening the problems in these state departments. A private company submitted a study to the Finance Ministry yesterday as to how it can become more efficient through the reorganization of its operations but it is not clear whether the proposals will be adopted. Making these problems worse are the poor ties between Finance Minister Giorgos Papaconstantinou and the general secretary at the Finance Ministry, Dimitris Georgakopoulos.