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Victoria Mindova

Over half of the employees of the Greek tax administration are over 50 years old and 26% are over 55. "You cannot solve a problem with the same mindset that you used before you reached an impasse," George Samotrakis, auditor and chairman of Audit Service AE, paraphrases Einstein. He spoke at the annual tax forum organized by the Hellenic American Trade Union in Athens, which once again focuses on the problems of the tax system of the country and seeks solutions for its improvement. Greece experiences constant problems in the collection of tax revenues and fails to meet the targets set by international lenders to improve its performance.

"There is no common policy for the implementation of a specific plan for the improvement of the performance of the tax administration," said firmly Samotrakis. He notes that the published action plan of the Greek tax administration contains fifty-one measures but there is no clearly defined vision for achieving the objectives set. He states that there are steps in the right direction in this strategic plan but they are insufficient for the general improvement of the activity of the tax offices.

The reform plan contains various measures, including the appointment of a director of tax revenues in the Ministry of Finance. The long-term lack of focused responsibility bears the sign of persistent omissions and failures in achieving the goals of revenue collection in the tax coffers. Reducing the tax administration is another measure that has been effective since last year. It has reduced the number of regional tax offices from 290 to 140, but has not made them more effective and useful to citizens. The specialist insists that we cannot change the way the system works until we change the old mentality.

Stavros Costas, chairman of the tax commission of the Hellenic American Trade Union, in turn, stresses that the problems in the tax system are not only a Greek patent. Costas cites European Council President Herman Van Rompuy, who announced a few days ago that Europe had lost a trillion euro from tax unfairness. "An easy and operational tax system is the foundation of success," insists the tax specialist. The mode of operation and the effectiveness of the tax services is another important factor that contributes to reducing the tax evasion.

"The majority of tax employees are poorly paid and trained, and they lack the motivation to improve their performance. At the same time, unfair taxpayers are ready to do everything they can to avoid indiscriminate taxation and to hide their income," said Nikos Karavitis from the Institute of Economic and Industrial Research, who also commented on the current situation.

Haralambos Nikolopoulos, president of the federation of tax employees, strongly resisted the charges. He presented a series of problems in the legal and operational framework of the tax system that hinder the work of tax employees. In addition to the numerous and chaotic contradicting laws, the lack of a uniform electronic system in the tax services remains a major problem.

"In many tax offices, there is no working electronic system that serves the local tax administration and connects it to the Ministry of Finance. This is also mentioned in the report of the International Monetary Fund, which notes that the employees of many tax offices in Greece do not yet have computers. They process the data by hand, which is inexcusable in the 21st century," said Nikolopoulos.

He did not fail to note that despite the loud promises, Greece still lacks the political will to fight tax violations and called the claim that the public sector in Greece was too large, a myth. "The members of the supervisory Troika have also established that the staff in the tax administration is insufficient as pointed out in the lenders’ report in January 2013 too. Why does the government insist on layoffs instead of seeking to fill the gaps and improve the performance of the tax services?" asked the trade unionist.

Transparency in the activities of the tax administration is another key condition for its effective operation. Highly qualified staff is also crucial. Tax employees should be effective in the control process, fair and quick in order for the services to citizens to meet the required quality without being detrimental to the revenue to the state treasury. This is the opinion of Chris Sanger, who is global director of tax policy issues at Ernst & Young and consultant to a number of governments in improving the tax administration.

The government should set clear targets as regards the results of the tax policy pursued. Sanger insists that reforms must not be implemented to manage the situation for a short while (short term fix); they must have a clear effect in the long term. The reform plan should be presented to the general public in order for it to understand the meaning of changes and the need for their implementation. He stressed that the administration should be computerized as much as possible not only to reduce the cost of services, but also to facilitate its work.

Financiers, auditors, accountants and economic analysts who participated in the forum in Athens support the idea that the tax system in Greece needs immediate reforms. This is the leitmotif, which has been repeated over the past 15 years but it seems that any change exacerbates the problems in the tax administration rather than solving them. Changing the personnel with young, ambitious and well-trained people is just the beginning. The full computerization of the tax system and the regional offices will not be sufficient either. It is necessary to simplify the system, introduce clear rules and tighten the control, thus putting in order not only the revenue, but also the performance of the employees.