Greece’s top tax official, Harry Theoharis, said his abrupt resignation on June 5 was for “personal reasons” and said he wasn’t squeezed out for allegedly mishandling the critical job of trying to bring in more tax revenues.
The position of General Secretary for Revenues was created on orders of the country’s international lenders, the Troika of the European Union-International Monetary Fund-European Central Bank, who aren’t happy Theoharis either quit or was fired.
Greek media reported that the government, particularly Finance Minister Yannis Stournaras, who had been sniping at him, felt Theoharis had mishandled the position politically, and had “miscommunicated” a document last month a document which forced the government to deny it has instituted a retroactive tax on foreign bondholders.
That sent Greek 10-year-bonds to two month highs and forced the government to withdraw the document, just after the successful floating of a 3-billion-euro five-year bond, the first since a crushing economic crisis began four years ago.
Theoharis was brought on board to modernize an archaic and jumbled tax collection system that had allowed tax cheats to avoid paying with impunity and run up $70 billion in unpaid debts to the state, most of which will never be collected, officials have admitted.
That coincided with big pay cuts, tax hikes, slashed pensions and public worker firings imposed by the government on orders of the Troika, which had put up 240 billion euros ($327 billion) in two bailouts.
Thehoaris’ resignation – or firing – came less than two weeks after Prime Minister Antonis Samaras’ New Democracy Conservatives took a beating in the country’s elections to send 21 representatives to the European Parliament, which was won by the anti-austerity major opposition Coalition of the Radical Left (SYRIZA).
Following the announcement of his resignation by the Finance Ministry, a teary-eyed Theoharis told reporters he was stepping down “for personal reasons”.
“No, I don’t feel like a scapegoat,” he said when pressed by reporters on whether he was forced to resign. “Because to be a scapegoat something must’ve gone wrong and, in my job, nothing went wrong. I delivered results and this is widely known.”
Citing unidentified sources, leading Greek conservative daily Kathimerini said the Troika was informed about Theoharis’s departure.
“If his departure does in fact take place, it will take the form of a resignation as the secretary-general’s term is for five years,” Kathimerini wrote.
The IMF in Washington said Stournaras met IMF chief Christine Lagarde earlier this week to discuss the road ahead for Greece and issues of “common interest”, but declined to give details.
The IMF also postponed the planned release on June 5 of its fifth review of Greece’s progress under its bailout, citing “an internal processing issue,” which is usually diplomatic code to stall the release of information.
The report is expected to be critical of the government’s reform progress and its delay came the same day that the Parliament was suddenly, and without reason, shut down for two weeks, prompting SYRIZA to say it was done to stifle criticism and debate.
Theoharis was appointed in January of 2103 for a five-year term that was supposed to be bulletproof and would see him stay in the job regardless of who was in power – unless he quit.
His departure came as a rattled Samaras was readying a big Cabinet shakeup that could also see Stournaras bumped, although it could be to take the job as Governor of the Bank of Greece.
Theoharis’s job was to rid the tax service of political meddling and remove underperforming officials, a tough task in a country where many have political protection and where tax evasion is still out of control.
He merged tax offices to pool resources and make them efficient. “I tried to consolidate the tax system … I haven’t taken any (austerity) measures,” he said. “The measures were taken by the government. My job was to implement them.”
He defended his work. I don’t feel like I’ve been made a scapegoat because something went wrong,” he said. “Those who feel that something went wrong should look at their own actions,” he said. He emphasized that his job had been to enforce policy decisions, not to formulate them.
Stournaras, who a week ago had delivered scathing criticism of Theoharis, suddenly switched gears at his departure and praised him to the skies.
“Mr. Theoharis, through his efforts, decisively supported tax reform and the government’s goals in the last two years with uprightness, a sense of responsibility and integrity. He was called to rebuild taxation and customs administration from scratch, began radical reforms that laid the basis for its modern, independent and effective function,” he said.
He added: “Most important of all, he did all this while steadily bringing results and systematically exceeding the targets set, something that was reflected in the good results in terms of the budget,” he said. If that were the case, he didn’t say why the government didn’t want Theoharis to stay in the thankless job.
European Commission spokesman, Simon O’Connor however expressed “serious concern” at the resignation and had played a “key role” in improving Greece’s finances.
“It is essential that the government ensures full continuity in the delivery of planned reforms to improve the efficiency of the administration, combat fraud and evasion, and secure increasing government revenues,” he said.