Fighting tax dodgers
If there is one aspect of economic policy on which the main parties could cooperate, even if not reach a broader political consensus, it’s the fight against tax dodging. It has often been said that the deficit reduction demanded by the European Commission runs into the state’s failure to collect the required amount of taxes. With few exceptions, businesses, both small and large, are guilty of not passing on the customers’ VAT payments to the state. But if someone is to blame for the current impunity, it’s the conservative administration. The repeated blunders in the National Economy Ministry have sent tax dodgers the wrong message. Tax evasion intensified during PASOK’s rule, particularly the second of the sleaze-ridden Simitis governments. Failure to collect sufficient revenue after 2000 without new taxes was one of the reasons that pushed PASOK’s economic policy planners to sweep debts and deficits under the carpet. Extensive book cooking embarrassed the country and brought the economy under EU supervision. Given that extensive tax dodging threatens the execution of the 2006 budget – and by extension Greece’s image and living standards – Socialist leader George Papandreou cannot afford to duck his responsibilities merely because PASOK MP Vasso Papandreou attacked the budget using the all-too-familiar opposition stereotypes. She said the budget hits low-income groups while undermining economic growth. George Papandreou must take a stand. Does he agree with EU Economic Affairs Commissioner Joaquin Almunia on the need for extra tax measures? Or does he condone the government’s gradual adjustment policies? If he agrees with the government – which I think he does, at least in private – then he must also demand strict penalties for tax dodgers, or at least the big ones. Greece is one of the few states in Europe where tax evasion is not a crime.