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Former General Secretary of Greek Finance Ministry Says Entrenchment Cases Give Boost to Tax Evasion

The former General Secretary of Information Systems of the Greek Finance Ministry, Diomidis Spinellis talked about corruption in Greece and the ‘4-4-2 system’ (or 40%-40%-20%) that is a common secret in the field of tax evasion in Greece.
According to this system, that is a reference to football strategy, you split your tax payment with the tax inspectors, and you get a discount. In particular, an individual or company that owes 10,000 euros in taxes, pays 4,000 to the inspector, keeps 4,000, and pays 2,000 to the state.
That helps explain why, in a developed country of 11 million people, only around 15,000 individuals declare an annual income of over €100,000.
Tax collection frequently declines sharply in the run-up to elections, partly because politicians try to curry favor with voters by relaxing enforcement.
Instead of running on their party’s policies, politicians give promises as to what they will do for their voters: ‘When I’m in government, I will make sure your daughter gets hired somewhere’.
Spinellis emphasized that major problems of Greek economy except for tax evasion are bad administration and inefficiency. Moreover, he talked about retrenchment cases on behalf of administrative members in which such a decision it is being issued that the inspectors of tax control can not control all the tax infringements of the taxpayer but only what the decision provides.
As a result, even if it is obvious that the tax payer owes much more to the state, the wording of the decision makes the inspectors not to control the case further.
In addition, Spinellis underlined that during his tenure at the Greek Finance Ministry, many Internal Revenue Offices completed only the 6% of the cases that have been undertaken.

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