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Victoria Mindova 

The Minister of Finance Georgios Papakonstantinou plans to raise almost 12 billion euros over three years by fighting tax evasion in Greece. The Minister plans to increase the 2011 revenue to the state treasury by 1.5 billion euros through tightening the belt of the tax services. These revenues should jump to 4.4 billion euros and 5.8 billion euros respectively for 2012 and 2013. The main measures which will bring this revenue include improving the control processes, introducing a better system for collecting the overdue payments and the revised calculation of tax liabilities of individual persons according to their property status. The ambitious plan was announced shortly before the arrival of the supervisory Troika in Athens, which said in mid-April that it wants to see real actions, not just promises made by the Socialists in power.

"Tax evasion is a crime against the state," said Papakonstantinou and stressed that the biggest challenge is to return the confidence in the tax system. So, the government, on the one hand, will implement specific actions, and citizens, on the other, will have to keep the adopted laws and to be correct in terms of taxes. The first steps are to cut the red tape and to improve the connection between the citizens and the tax offices. So, the Ministry will proceed from the middle of the year to the closure or merger of 200 out of the 289 tax offices. Each municipality will have only one tax administration, and many of the functions now administered by the tax offices will be transferred to the service centres available to the citizens at the municipalities. After the tax reform by regions, over 3000 tax officials will be transferred to other state institutions where they will be useful fort heir previous experience.

Georgios Papakonstantinou announced that Greece is in the process of negotiations for signing a contract with Switzerland for the right to tax the Greek taxpayers who have bank accounts in Switzerland. Currently, the Ministry of Finance has a list containing the accounts of about 2000 Greek citizens with thick bank accounts in Switzerland and inspects the origin of their money. Similar procedure is expected to be operated for the Greeks’ bank accounts in the United Kingdom and Germany. Asked whether there are politicians among the names Papakonstantinou refused to specify but said that journalists should not expect sensations. It is not yet clear whether the names of the owners of Swiss bank accounts will be announced after the inspection ends.
 
Particular attention is expected to be paid to 1000 of the largest companies in Greece, for which a special working group will be formed. It will cooperate with the large enterprises in the country so that to ensure their tax regularity. Free lancers and those involved in offshore companies are rated as the most risky taxpayers. Those taxpayers that have overdue payments to the state for more than a year and owe a total of over € 150,000 will be not entitled to any tax breaks for the current fiscal year. The citizens, who do not pay to the state within the due terms and have no grounds for appeal, would face frozen bank accounts and property seizure after the court decision.

It has been found so far that the informal sector has a turnover of between 25% -35% of the GDP each year, and the state loses an average of between 10-15 billion euros from uncollected taxes on undeclared work. Papapkonstantinou said that the three-year program to fight tax evasion will radically change the control system and collection of tax debts. "The government wants to reduce the tax rates for the individual persons and the companies in the coming years. We will need positive results in the fight against tax evasion to make this possible."

While waiting for the real results in the future, Greece is facing serious problems now. Papakonstantinou could not avoid the issue of the foreign debt restructuring. Asked by a journalist what the government intends to do with the avalanche growing debt in a period when the country is not able even to meet the objectives of the Memorandum, the Minister of Finance said: "There will be neither restructuring nor haircut of the debt," and would not like to comment this issue further. Greek economic analysts commented in an informal conversation with GRReporter that the expected revenues from the implementation of the program to fight tax crimes are quite optimistic. Additional revenue of 12 billion euros by 2013 sounds like the words familiar to the former communist countries from the recent past "to fulfill the five-year period for three years" - fascinating, but impractical.