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Extra taxes in the dock

26 September 2011 / 20:09:08  GRReporter
4586 reads

Anastasia Balezdrova

Lawyers and tax advisers undertook legal offensive against the extra taxes the Greek government imposes with the speed of the light. Days before the vote of another imposition – the extra tax on real estate – claims for cancellation of ministerial decisions, which impose unaffordable fees, were filed in the Supreme Administrative Court.

The first claim filed the well-known criminologist Angelos Tsigris, who asked the senior judiciary to cancel the decision of the Minister of Finance for the imposition of an extra tax on the income of individuals, exceeding the sum of € 12,000, and an annual fee for all freelancers. According to the attorney, the ministerial decision is in conflict with basic constitutional principles and rules. "With my claim to the Supreme Court I put into question the legitimacy of the ministerial decision, which violates the principles of equality, legality of taxes, the payment of taxes and non-retroactivity of tax laws that are enshrined in the Constitution, the European Convention on Human Rights of fair trial and the additional protocol to protect the property." He adds, "the excessive increase of the tax burden on citizens in combination with the reduction of their income leads to a real inability to pay new taxes, seriously affects their financial situation, leads to seizure of their property and directly violates the Constitution and fundamental rules of law."

Angelos Tsigris’ claim was followed by the claim of the Bar in Athens. The lawyers turned to the Supreme Court to annul the decision to impose an annual fee for all freelancers. The Athens lawyers uploaded the text of the claim on the website of the Bar as an example for their colleagues.

The "magic" notes that appal and panic many Greeks began to be sent two weeks ago. Meanwhile, the government managed to increase the value added tax on restaurant services to 23 per cent.

The Pan-Hellenic union of tax advisers filed a claim to the Supreme Court requesting to repeal the ministerial decision, which began to apply from the beginning of September. GRReporter contacted Panagiotis Mandzanas - EU member of the Union and long-time inspector in the Ministry of Finance, who explained what the grounds for legal action are.

"The VAT rate of 23 per cent imposed on restaurant services is the highest in Europe, where the values ​​vary between 2 and 6 per cent. We were within this range until the increase, which was unreasonable. Under the law, a tax may be increased in cases of force majeure, but the reduction of government revenues is not force majeure, nor could it have greater power than the rules and principles in the Constitution and affect people with lower incomes in such a cruel way. Here we have a direct violation of the principle of equality and the principle of equivalence, whereby citizens pay taxes according to their financial capacity. The government imposed this tax, which affects the activity of thousands of companies in the restaurant business in Greece, due to its inability to create an effective system of levying and collecting taxes. "

He accused the Greek government in pursuing controversial policy that puts Greece in an uncompetitive position in the field of tourism. "This leads to closure of companies and increase in unemployment, though the Constitution requires the government to protect the jobs, not to create unemployment by its actions. The increase is also contrary to EU directives and additional and heavy taxes in no case should be imposed in periods of recession because they make it deepen."

According to Panagiotis Mandzanas, the Ministry of Finance has increased the tax without holding the necessary public and parliamentary dialogue and without taking into account the opinion of trade unions and professional organisations on the matter. The claim of the Pan-Hellenic Union of tax advisors offers the companies in the restaurant business the opportunity to turn to the Supreme Court requesting the annulment of the ministerial decision.

This is not the first legal battle of the tax advisers. In November, their union filed a claim for cancellation of the tax amnesty law. "The basic constitutional principles that I mentioned on the new claim were also violated, but there were differences in addition. While in the beginning the law was valid for all, even for those who have received invalid and fictitious invoices, exceptions for certain types of companies suddenly appeared. Stock companies and freelancers with property worth over € 400,000 were among them. We stated in the claim that this is about inequality."
The Supreme Court has not yet issued its decision on the claim, but "as far as we know the magistrates have requested further justification by the Ministry of Finance. However, some of our recommendations were used and people and companies that I mentioned above were included in the new decision for tax amnesty."

According to Panagiotis Mandzanas, the extra property tax that will be voted on tomorrow also has legal flaws. "It was decided quickly and will be voted urgently without being discussed enough in Parliament, as the Constitution stipulates. This will add yet another tax to the already heavy burden of 20 other real estate taxes, but the biggest legal and practical obstacle is that it will be paid through electricity bills."

In any case, the lawyers warn that the examination of the claims in the Supreme Court does not exempt the citizens from the obligation to pay them. This means that if not paid within the specified term they will be subject to an interest of 1.5 per cent per month. Even if the court rules in favour of plaintiffs, the decision will be valid only for people who have submitted claims within 60 days of receipt of the tax notice. "The court decision itself can not oblige the government to repeal the taxes; it is its decision to cancel them. For good or bad, our tax system is designed this way," they stated.

Tags: SocietySupreme courtCancellation claimMinisterial decisionLawyersTax advisorsTax amnesty
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