OPINION

Unfair taxation

In all OECD countries tax rates are going down while the tax base and revenues are getting bigger – except in Greece. Here the tax rates, the tax base and the revenues from taxes are all in decline. The reason for this is extended tax dodging, which is stealing funds from the public funds and at the same time exasperating social inequality. In a sign of domestic trends, the OECD report shows that Greece’s revenues from direct taxes will remain at last year’s levels (that is despite the spectacular increase of the country’s gross domestic product, or GDP) while the revenues from indirect taxes have skyrocketed. The increase in indirect taxes exceeds the GDP hike by 38 percent. The above figures show that the weaker strata still make the stronger contribution to the state’s revenues from taxes. Also, it demonstrates that tax inspectors must do a better job in cracking down on tax evasion. Tax data show that, some fluctuation notwithstanding, the state is growing more and more dependent on indirect taxation. In 2007 the increase of direct taxes will not match that rise of the GDP. Meantime, the increase in indirect taxes will exceed the GDP rise by 24 percent. The government must broaden the tax base and clamp down on tax dodgers. Tax evasion is taking a hefty toll on the economy and the low-income classes. The conservative administration should examine the possibility of harmonizing Greek legislation with that of other Western countries. These countries must have had a good reason to make tax dodging a criminal offense and it is reflected in their tax performance.