The Greek tax drama

Numbers alone can never interpret reality, not even a strictly financial one. Besides, the art of creative accounting has a number of fans in this country, many more, for the time being, than “creative vagueness,” a technique whose name recently entered the lexicon of the political agora thanks to a finance minister who has proved to be anything but financial in his interviews. Nevertheless, certain numbers speak for themselves. This is the case with those announced by the president of the association of Greek administrative judges, Irini Giannadaki, at the organization’s general assembly.

These numbers, which proved highly disappointing, point to some of the causes behind the Greek tax revenue system’s serious malfunctions. Stopping even the best intentions, in cases when these actually do exist, they bog down the system, preventing it from meeting the targets that each new government joyfully announces upon its election. In this way, when it comes to tax issues, justice in Greece has been uncomfortably selective. According to Giannadaki, six tax legislation packages comprising 177 articles and 17 laws including 71 new tax measures have been approved in the last 30 months. This was accompanied by 111 ministerial decisions and 138 clarifying circulars.

This is not a sign of originality displayed over the last three years, but further proof of the tax system’s resistance: Since 1975 there have been 250 tax laws and amendments, along with another related 3,450 laws and 115,000 related ministerial decisions. These are dizzying figures, thanks to which the number of unpaid billions in tax debts is rising. Nevertheless, Greek legislative productivity is to be admired when compared to, for instance, the unthinkable stagnation displayed in the United States, where only 10 tax laws have been voted in the last 250 years.

Given that each amendment opens a back door and each interpretive circular a back window, there is less cash reaching the public coffers via taxes than that flowing out of the country in search of greener pastures in Switzerland, in addition to that hidden underneath mattresses at home for emergencies.

While there are many factors which contributed to Greece’s financial collapse (such as the Olympics), tax evasion and tax dodging are among the most serious. This was confirmed by a report compiled by the IMF and the EC regarding Greece’s tax administrative system, which concluded that the state operates as a protector of tax evasion. The numbers concur: When it comes to the country succeeding in achieving the eight minimum conditions of autonomy with respect to its tax collection mechanism, the report’s authors awarded 2 “possible,” 1 “possible/unlikely,” 3 “unlikely” and 2 “unlikely/zero.” None for “certain.” If the new administration doesn’t succeed in making the impossible possible we won’t be able to blame our partners.

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