Greece’s Finance Ministry has admitted what everybody in Greece already knew: the government has been playing favorites with VIP’s and allowing them to dodge taxes, with inspectors checking with supervisors before deciding how to handle the case of people who had political protection.
In a bid to change that, ministry officials and inspectors have been asked to do stop doing it and not to allow any exceptions for paying taxes. That came in a memo which reportedly came from Finance Minister Yiannis Stournaras who has said he would make going tax cheats a priority but hasn’t done so yet, even as international lenders are anguishing over why Greece allows so many tax evaders during a crushing economic crisis.
The answer may have come in the memo itself that indicated some personalities enjoyed political protection in the past, without identifying them or without stating whether they continue to do so until the coalition government of Prime Minister and New Democracy Conservative leader Antonis Samaras and his partner, PASOK Socialist chief and his new Deputy Prime Minister Evangelos Venizelos. Their two parties have been in four off-and-on for four decades and had given protection to VIP tax cheats.
The memo also stated that another 4000 tax inspectors will be appointed to a sector notorious for being among the most corrupt in the country and for allegedly taking bribes to allow people to avoid paying taxes. This time, however, the government said it really, really is serious about tax evasion and will fire inspectors who don’t do their jobs.
According to reports, the memo also underlines the “tragic” state of tax collection in previous years. It claims that tax inspectors are repeatedly contacting the Finance Ministry to inform them that they have indications about high profile people, such as singers, lawyers and mayors, evading their taxes. Inspectors, it claims, ask what action they should take and seek permission to do their jobs without retaliation.
The memo says that for many years such individuals were considered “untouchable” but that the Finance Ministry would no longer accept any exceptions. “Whoever cheats on taxes, even if it’s the Pope, will have to pay,” the memo reads. However, a list of 2,062 Greeks with $1.95 billion in secret Swiss bank accounts still hasn’t been checked for tax cheats although it’s been in Greece’s possession for three years.
Earlier this year, once-popular singer Tolis Voskopoulos, who was convicted of evading 5.5 million euros ($7.5 million) in taxes and received a suspended three-jail term had all his penalties annulled by the country’s highest court, the Council of State, without any explanation why he was allowed to get off scot free while lesser debtors were being pursued for all they had.
For a second time this year, Greek fashion designer Lakis Gavalas was convicted of evading taxes, and for a second time dodged jail. An Athens misdemeanors court on July 19 passed down a five-year suspended prison sentence after finding him guilty of tax evasion for 2012 to the tune of 1.5 million euros, about $1.97 million. Ordinary Greeks who don’t pay taxes are being pursued by the authorities, however, and in one case a metal worker lost his house over a 1700-euro debt.
Greece is seeking outside help too in the long-failed effort to collect $70 billion in back taxes while it has been relying instead the last three years with pummeling people with pay cuts, tax hikes and slashed pensions while not few major tax cheats have been prosecuted and those who have received lenient sentences from the courts, including wiping out what they owed.
The former heads of the Irish and Swedish tax administrations have been appointed to a committee that will advise the Greek government on ways to improve tax collection. The Finance Ministry announced that Frank Daly, currently the Chairman of Ireland’s National Asset Management Agency, and Mats Sjöstrand, who headed Sweden’s tax agency between 1999 and 2009 will hold two of the five positions on the committee.
The other three positions will be held by Theodoros Fortsakis, head of the Law Department at Athens University, Yiannis Stavropoulos, a Supreme Court lawyer, and Katerina Savvaidou, a lecturer in law at Thessaloniki’s Aristotle University.
The panel will advise the Finance Ministry’s general secretariat for revenues, which is headed by Haris Theocharis. Setting up an independent revenue-collection service is one of the commitments demanded by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) who effectively control what happens to the Greek economy.