The Mysterious Formula “4-4-2″ in the Greek Tax Collection tagged: , , , , , , , ,

The Mysterious Formula “4-4-2″ in the Greek Tax Collection

Posted by keeptalkinggreece in Economy

No, this “4-4-2″ has nothing to do with some magic soccer formula that fills the pockets of bookers and betters. It it the formula that fills the pockets of tax officials! When it comes to corruption in the tax collection mechanism, the rule 4-4-2 or 40%-40%-20% applies. 40% discount for the taxpayer – 40% tax controller ‘salary- 20% the final revenue that goes into the state registers. This shocking revelations about the tax revenue-raising scheme were made by former general secretary for Information Systems at the Finance Ministry, Diomedes Spinellis. Speaking at a conference entitled “tax Evasion and Social Justice”,  Spinellis stressed that this is the common practice even now that Greece is in dire economic situation.

Spinellis said that this formula is a common secret in the field of tax collection and before the conference audience could recover froom the shock, he dropped a second bombshell ” It is well known that when the state returns high amounts of taxes to taxpayers, an 8% goes directly in the pockets of the tax officials“. However, this percentage of ‘pocket money’ was corrected when Nikos Lekas, the director of Planning & Control of Financial Crime Units (SDOE) was speakign at the panel. “This percentage has increased to 10%” Lekas said.

The shock for the aidience of the conference organized by the Hellenic Foundation for European & Foreign Policy (ELIAMEP) took no end, as in addition to corruption in the tax collection mechanism, Spinellis spoke of two other problems: the ineffiency and the mismanaggement. He spoke of tax control decisions that practically tie the hands of the controllers and cases that take 20 months to be closed.

Nikos Lekas from SDOE complained also about unexcused delays in the implementation of the laws and brought the example of the opening of bank accounts of persons suspected of tax evasion. ”The law was passed in 1995 but it was implemented only in 2010″ Lekas said. He said that the taxation system as a system leading to tax evasion because “it is complicated, non-applicable and inefficient.” He described the small town of  Kranidi in Eastern Peloponnes is the Lichtenstein of Greece as there is a one tax office with five employees but where 178 offshore are registered.

Spinellis revelation about the “8% pocket money for tax collectors” set Finance Minister Evangelos Venizelos on alert. Even though he tried to downplay the claims, he ordered the economic prosecutor to proceed immediately into an internal investigation.

Diomedes Spinellis resigned last  October from his post. Some Greek media claimed that he was partly to be blamed for missing targets of tax collection, some other that he was himself a target as he was trying to clear things.

Nikos Lekas is current director in the SDOE.

Source: TA NEA