“Bahalo”: State decisions plague the already troubled Greek citizen

Posted by in Economy

Bahalo (Μπάχαλο) is a nice word. Greeks use it many times per day. In fact, they say “Bahalo” every time they contact a public service or they watch news on television.  Bahalo – accent on the first syllable – means bloody mess, chaos and big confussion. It literally gives the perfect description of our daily life here, especially during the last three years. Bahalo is the mess created by too much bureaucracy, much too many state decisions that are overturned and modified, bad communication between state organizations, a broken link between the state and its citizens. An ineffient and sufficient state administration

Bahalo is confusion created by the state, causing trouble for the citizens. Bahalo is there where nothing properly works.

How else could I describe Bahalo if not with some concrete examples?

Example One

Bahalo is the mess the Finance Ministry created on the issue of ‘emergency property tax’ by issuing one circular after the other on monthly intervals. Result of the Bahalo was that neither the Public Power Company, not the tax offices, nor the citizens had an idea how to pay the levy, how to not-pay it, how to avoid electricity outage, how to pay it in installments.

Example Two

Another Bahalo was the decision to allow property owners to ‘legalize’ illegal building by paying ‘legalization fees’ of several hundreds euro. For two years, everything it was flowing as planned, citizens were paying the fees after running to architects and building engineers, banks and city planning offices… Until the supreme court ruled beginning of the month, that such a decision taken by the Papandreou government was …illegal. Ever since the news horrified the citizens,  the government officials and the Finance ministry, no updates have been issued by the government on this issue. The deadline to ‘legalize illegal buildings’ is still valid until May 30th, but nobody knows what to do.

This week Bahalo

The latest Bahalo occurred this week. In fact it were two Bahalos:

The first has to do with the EU-Gov’t subsidized program for 400,000 families with no-member with work or job. The government had proudly announced the program to ‘create temporary jobs of less than 500 euro for long-term jobless’ but the EU raised objections, although the Troika had agreed. The issue is still pending.

Bahalo with tax declarations

This nice example of how the Greek state has troubles to get things right occurred on Friday.

TaxisNet, the electronic portal for submitting tax declarations of 6.5 million taxpayers opened on Friday afternoon (May 25th) after a delay of four days. Official deadline for submissions is the 30. June 2013. And here comes the real Greek Bahalo:

Although TaxisNet opened, the Finance Ministry has not issued yet the final circular on how to fill all the necessary details of tax declaration codes as new procedures and declaration chapters have been added this year. Like the ‘declaration of interest from bank accounts’ or what will happen with internet-illiterate taxpayers, because the electronic submission is obligatory this year.

Not to mention the time the Finance Ministry had to prepare its final circular and instructions to taxpayers. More than a year, I think, since the new taxation system was decided.

But the FinMin logic is this: we add together the revenues needed by the Troika and if they are not satisfied, we proceed to last-minute changes to collect additional money.

It is inevitable that tax declaration submissions will be delayed, Greek media speak of a possible extension to end of July. With or without extension, no tax declaration will be processed before August, leading to many taxpayers possibly having to pay their tax in two, rather than three, installments.

 Total bureaucratic bahalo: this year, taxpayers will have to write down also their Public Power Company (DEH) subscription number, so that the finance ministry will be able to cross check the declared square meters of a property.

On Friday, the general secretary for the taxation information system Haris Theoharis told private Mega TV that taxpayers with no internet access and internet-savy skills will have to submit their declaration handwritten on paper and then go to the tax office.

“It will be at the discretion of the local tax office chief to decide if the handwritten tax declaration will be accepted.”

Can you imagine the trouble for the taxpayer, especially now that many local tax offices have been shut down due to austerity? Can you imagine the village granny having to travel 30-50 km to find out a) she has to stand long queue to speak with the taxman and b) the taxman rejects her handwritten declaration? The granny should go back to her village and ask the support of her internet savy grandson -who may have no idea about filling a tax declaration-  or seek the aid of a tax consultant – who will do it for her for a fee of at least 40 euro.

Bahalo or tricky rip-off?

Another point of Greek bahalo is that as of this year bank account holders will have to declare ‘interest’ from the money they have at the bank – even though 15% tax on interest is deducted right before the account holder receives the interest.

The Finance Ministry was generous enough to exempt from tax declarations interest up to 250 euro although originally it was said “interest must be declared even if it is 0.01 euro“!

Now the taxpayer has to go to the bank and request a printed confirmation of how much interest he received for the year 2012. Here is to note, that the banks refused to automatically send this information to the finance ministry as originally planned and requested.

What’s the point of declaring interest from bank account if already taxed? Oh, that’s for the simple reason that the Finance Ministry will charge it with solidarity tax 1% to 4%.

KTG understood that adding the interest to other sources of income, the total income of taxpayer will be higher and therefore the more solidarity tax will be paid. For example, a taxpayer will pay 3 euro for 300 euro interest.

The latest on tax declaration bahalo I heard on Sunday:

1. Insurance funds should deliver to finance ministry pension confirmations of  pensioners/taxpayers so tax officers can cross check with tax declarations. Some insurance funds cannot do it because they have no data in electronic archives.

2. Theoharis’ assistant told private Mega tv (see above), the finance ministry will ask the banks to automatically send information on interests from bank accounts. Although the banks refused to do so.

How all these cross-checks and double checks will take place, when there is personnel shortage, many local tax offices closed down is another aspect of the increasing Greek bureaucracy which was supposed to be trimmed down.

Bahalo on purpose?

Bahalo here or Bahalo there, the point is that this Troika-bound government does not miss a chance to create confusion and grab even the very last cent out of the pocket of its citizens. All tax- and fee decisions (whether legal or illegal by court ruling) have just one single purpose: to collect money from those who have and those who have not. Preferably from those who have ‘little’ or not at all, because they are weak and have no means to defend themselves.

The state formula is simple:

we do not raise new taxes, we do not proceed to new wages and pension cuts, but we do our best to impose small poll levies so that nobody will revolt.

In short, Greeks are exposed to an economic and psychological war. No wonder that nobody dares to react, fight for rights, protest economic injustice, harsh austerity and financial robbery. The alleged much-feared ‘social unrest due to harsh austerity’ never happened. Greeks were put out of action. Somebody pressed the ‘disable’ button.  Greeks became Bahalo-ridden!

PS I wonder how the much-praised EU Task Force with the 50-member EU-technocrats under the leadership of Horst Reichenbach or the German Fuchtel-connection have not managed to solve the Greek bahalo yet. But it serves their purpose, no?

Detailed information on tax declaration submission bahalo you can read here