Fighting tax evasion

The recent, spectacular increase in state revenues is a sign of better days to come for Greece’s troubled fiscal situation. Governments have traditionally failed to meet their budget targets because of widespread squandering of the public coffers for politically expedient reasons. Worse, in past years state revenues have declined because of an epidemic of tax dodging. The conservative government, having paid a heavy toll for low revenue levels, last summer launched a systematic campaign against tax evasion that is already yielding fruit. The government halted the dubious raids by the financial crimes squad (SDOE) and tax penalization of small and medium-sized businesses. Rather, it equipped the ministry with high-tech tax-crosschecking systems, supplying tax offices with data that enabled them to undergo effective inspections, especially big firms that managed to hide profits through sister companies. Economy and Finance Minister Giorgos Alogoskoufis opposes publishing the names of tax evaders, which he tends to regard as an empty publicity stunt. Instead, he believes in hefty fines that will also add to state coffers. Indeed, many of Greece’s big shots have visited the Athens tax office to settle outstanding tax obligations in the past three months. New Deputy Economy Minister Antonis Bezas is smart enough to avoid sounding triumphant, but he has done a very good job of remobilizing the tax-raising mechanism. It would be premature to brag that the war on tax evasion has been won. There are so many holes in the tax net and there is so much corruption in the state apparatus that the big fish can swim around freely. But the government is working hard and gaining ground. That will be to everyone’s benefit. Soon the economy will be removed from the burden of EU supervision and the government will be able to reduce taxes on workers and the self-employed.

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