Thursday 7 April 2011

Delays in the Greek Tax Collection System

I dropped by my accountants’ office and had a word with the lead partner earlier this afternoon. He was surrounded by files and tax declarations and had a resigned look on his face. This is what he told me:

The Ministry of Finance only recently activated the MOF website for personal tax declarations. By recently, he means about 2 days ago, and the site is still beset by bugs and slowdowns. This is despite the fact that personal taxes can be filed since February.

He was wondering how the Ministry expected to address the deficit if there was a 2-month delay in getting the website operational for tax declarations. His office alone (2 accountants) had over EUR 250,000 in personal income tax ready to submit.

To make matters worse, he showed by a folder full of bank cheques (money orders) for tax payments from his clients. In the absence of a functioning website, the Ministry issued a circular stating that individuals can submit their tax declarations in person at the Tax Offices (ΔΟΥ), using a paper-based form and a banker’s cheque.

So he’s been going to the tax office for the past 2 months, but the staff there refuse to accept either the tax declarations, or the payments. They say “We are not responsible for this–you have to submit through internet.” No matter that a circular has been issued. My accountant suspects it’s because the staff at the Tax Office would have to manually enter the data on each form: this takes 3-4 minutes per form.

He also said that the MOF had still not issued instructions on collecting the 2009 real estate tax, or the 2010 tax on large real estate holdings. The value of these taxes are extremely high, and in a period of deficits, he was understandably wondering why they just didn’t go ahead and start collecting these taxes.

His conclusion:

a.      Despite the fact that Greece is in an unparalleled financial crisis, the front-line staff of the Ministry of Finance—the Tax Office—are well-paid civil servants in permanent positions who basically don’t give a damn about doing their jobs professionally or looking after the good of the country.

b.     That as long as this mentality exists, whatever promises Greece makes to the Troika will be impossible to keep.

I can’t say I can find anything in this conclusion to disagree with. I’m just wondering why nobody does anything about it. 

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