{ "title": "Greece’s Chief Tax Collector is on a Mission to Improve Compliance", "sourceUrl": "https://www.imf.org/en/publications/fandd/issues/2019/09/improving-tax-collection-in-greece-petrakis", "canonical": "https://www.imf.org/en/publications/fandd/issues/2019/09/improving-tax-collection-in-greece-petrakis", "overlayPath": "/en/publications/fandd/issues/2019/09/improving-tax-collection-in-greece-petrakis/index.md", "summary": "Maria Petrakis shares an inside look into how Greece’s chief tax collector George Pitsilis is trying to improve enforcement across the country.", "sections": [ { "heading": "Overview", "content": "- Article by MARIA PETRAKIS, F&D Magazine, Taxing Times, September 2019.\n- Profile of George Pitsilis, head of Greece’s Independent Agency for Public Revenue, and the agency’s efforts to improve tax compliance and enforcement." }, { "heading": "Challenges in Greece’s tax collection", "content": "- Tourism-driven cash transactions undermine VAT collection:\n - If tourist arrivals match last year’s numbers, some 30 million people will visit Greece this year, generating €16 billion in spending.\n- High VAT and incentives to evade:\n - Value-added tax rate of 24 percent.\n- Historic fiscal deterioration and shadow economy:\n - Budget deficit rose to more than 15 percent of GDP in 2009.\n - GDP fell by 25 percent during an eight-year economic crisis.\n - €289 billion in international bailouts.\n - Shadow/undeclared economy estimated to account for as much as 27 percent of GDP.\n - Some 75 percent of self-employed professionals declared income below the taxable threshold (IMF study).\n- Structural and institutional weaknesses:\n - Antiquated tax collection system, political interference, frequent tax-code changes, slow court dispute resolution.\n - Capital controls imposed in 2015, including daily limits on ATM cash withdrawals." }, { "heading": "Reforms and enforcement measures implemented", "content": "- Institutional change:\n - Creation of the Independent Agency for Public Revenue; agency opened January 1, 2017.\n - Agency intended to be insulated from political pressure and complex labor rules.\n- Public awareness and behavioral nudges:\n - Public relations campaign “Apodixi, please” encouraging tourists to use cards and ask for receipts (apodixi).\n - Monthly lottery offering taxpayers rewards of €1,000 for using payment cards.\n- Inspections and audits:\n - 50,500 on-the-spot audits and inspections planned for the summer season.\n - Audits and shutdowns of noncompliant businesses, including high-profile restaurants.\n- Technology and surveillance:\n - Surveillance drones used over Santorini to monitor issuance of receipts by tour operators.\n - Expanded access to third-party information such as bank accounts.\n - Customs mobile squads centralized; new special unit focused on big business, smaller firms and the self-employed, and high-net-worth individuals.\n- Mandatory hardware and digitalization:\n - Proliferation and mandatory requirement of point-of-sale terminals across professions and businesses.\n - Obligatory electronic invoicing and bookkeeping mentioned as broadening the tax base." }, { "heading": "Results and key statistics", "content": "- Point-of-sale terminals and electronic transactions:\n - Number of terminals more than doubled, to some 700,000, in the two years ending in December 2018 (Cardlink).\n - Value of transactions jumped to €31.5 billion from €19 billion.\n - Electronic payments contributed at least half of the increase in VAT revenue recorded in 2017 (IOBE study).\n - In 2018, electronic payments jumped by 24 percent to €31 billion (European Commission report).\n- Fiscal outcomes:\n - VAT accounts for one-third of government revenue.\n - Spending cuts and higher revenue helped generate a budget surplus of 1.1 percent of GDP last year, compared with a deficit of 11.2 percent in 2010.\n- Additional potential gains from card use:\n - Card usage as a percentage of private consumption was 14.8 percentage points below the EU average in 2017 (IOBE).\n - Annual VAT revenues would be 21 percent, or €3.3 billion, higher if Greece reached the average EU level (IOBE).\n- Remaining gaps and risks:\n - With easing of capital controls, tax compliance could suffer.\n - A quarter of the terminals installed in 2017 and 2018 remain inactive (Cardlink).\n - Self-employed comprise almost 30 percent of the Greek workforce (Eurostat) — the highest proportion in the EU and double the EU average — and are a major source of under-declaration." }, { "heading": "Behavioral and political context", "content": "- Cultural and demographic obstacles:\n - Older Greeks and rural populations prefer cash; self-employed often offer cash discounts to avoid reporting.\n- Political signals and reforms:\n - Promises to ease tax burden contributed to the election victory in July of Prime Minister Kyriakos Mitsotakis.\n - Mitsotakis announced cuts to property taxes and corporate tax rates and endorsed electronic payments and mandatory electronic invoicing and bookkeeping to broaden the tax base.\n- Leadership and organizational culture:\n - Pitsilis emphasized no relaxation of tax administration during election periods, contrasting with past practices of easing enforcement for political favor.\n - Pitsilis: “Tax evasion is not one monolithic thing… there is no one-size-fits-all approach.”\n - Pitsilis emphasized personal responsibility: accepting cash discounts to evade tax “harms our future, the future of our children, our pensions, and affects whether our child, or our grandchild, finds a job tomorrow.”" }, { "heading": "Policy implications and recommendations (implied by actions described)", "content": "- Combine technological adoption with enforcement and public education:\n - Expand point-of-sale terminal deployment and activation.\n - Maintain and publicize inspections, audits, and high-profile enforcement to raise awareness.\n - Use incentives (lotteries, rewards) to nudge card usage among consumers.\n- Strengthen institutional independence and data access:\n - Preserve the independence of the revenue agency and continue to broaden access to third-party data (bank accounts, electronic records).\n- Targeted strategies for heterogeneous evasion channels:\n - Deploy sector-specific investigative units for big business, smaller firms and the self-employed, and high-net-worth individuals.\n- Sustain reforms during political cycles:\n - Insulate tax administration from political pressures to prevent relaxation of enforcement during election periods.\n\nFrom: \"Greece’s Chief Tax Collector is on a Mission to Improve Compliance\" — MARIA PETRAKIS, F&D Magazine, September 2019.\n\n---\n\n Content in this bundle\n\n- آن الأوان لدفع الضرائب\n - آن الأوان لدفع الضرائب (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - آن الأوان لدفع الضرائب (PDF){rel=\"external\" type=\"application/pdf\"}\n- Momento de tributar ● Finanzas y Desarrollo ● Septiembre de 2019\n - Momento de tributar ● Finanzas y Desarrollo ● Septiembre de 2019 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Momento de tributar ● Finanzas y Desarrollo ● Septiembre de 2019 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Improving Tax Collection in Greece Petrakis\n - Improving Tax Collection in Greece Petrakis (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Improving Tax Collection in Greece Petrakis (PDF){rel=\"external\" type=\"application/pdf\"}\n- Greece’s Chief Tax Collector is on a Mission to Improve Compliance – IMF F&D\n - Greece’s Chief Tax Collector is on a Mission to Improve Compliance – IMF F&D (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Greece’s Chief Tax Collector is on a Mission to Improve Compliance – IMF F&D (PDF){rel=\"external\" type=\"application/pdf\"}\n- 課税強化に挑む時　マリア・ペトラキス著　ファイナンス＆ディベロップメント 2019年9月\n - 課税強化に挑む時　マリア・ペトラキス著　ファイナンス＆ディベロップメント 2019年9月 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - 課税強化に挑む時　マリア・ペトラキス著　ファイナンス＆ディベロップメント 2019年9月 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Налоги: время перемен – Финансы и развитие – сентябрь 2019 года\n - Налоги: время перемен – Финансы и развитие – сентябрь 2019 года (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Налоги: время перемен – Финансы и развитие – сентябрь 2019 года (PDF){rel=\"external\" type=\"application/pdf\"}\n- 征税时代 - 《金融与发展》2019年9月号·第56卷·第3期 - 国际货币基金组织季刊\n - 征税时代 - 《金融与发展》2019年9月号·第56卷·第3期 - 国际货币基金组织季刊 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - 征税时代 - 《金融与发展》2019年9月号·第56卷·第3期 - 国际货币基金组织季刊 (PDF){rel=\"external\" type=\"application/pdf\"}\n- Country Report\n - Country Report (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n - Country Report (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\nSource: https://www.imf.org/en/publications/fandd/issues/2019/09/improving-tax-collection-in-greece-petrakis" } ], "bullets": [ "[Markdown version](/en/publications/fandd/issues/2019/09/improving-tax-collection-in-greece-petrakis/index.md)", "[Structured JSON version](/en/publications/fandd/issues/2019/09/improving-tax-collection-in-greece-petrakis/index.json)", "[Bundle manifest](/en/publications/fandd/issues/2019/09/improving-tax-collection-in-greece-petrakis/bundle-manifest.json)", "Authors: MARIA PETRAKIS", "Published: September 1, 2019", "Article by MARIA PETRAKIS, F&D Magazine, Taxing Times, September 2019.", "Profile of George Pitsilis, head of Greece’s Independent Agency for Public Revenue, and the agency’s efforts to improve tax compliance and enforcement.", "Tourism-driven cash transactions undermine VAT collection:", "High VAT and incentives to evade:", "Historic fiscal deterioration and shadow economy:", "Structural and institutional weaknesses:", "Institutional change:", "Public awareness and behavioral nudges:", "Inspections and audits:", "Technology and surveillance:", "Mandatory hardware and digitalization:", "Point-of-sale terminals and electronic transactions:", "Fiscal outcomes:", "Additional potential gains from card use:", "Remaining gaps and risks:", "Cultural and demographic obstacles:", "Political signals and reforms:", "Leadership and organizational culture:", "Combine technological adoption with enforcement and public education:", "Strengthen institutional independence and data access:", "Targeted strategies for heterogeneous evasion channels:", "Sustain reforms during political cycles:", "**آن الأوان لدفع الضرائب**", "**Momento de tributar ● Finanzas y Desarrollo ● Septiembre de 2019**", "**Improving Tax Collection in Greece Petrakis**", "**Greece’s Chief Tax Collector is on a Mission to Improve Compliance – IMF F&D**", "**課税強化に挑む時　マリア・ペトラキス著　ファイナンス＆ディベロップメント 2019年9月**", "**Налоги: время перемен – Финансы и развитие – сентябрь 2019 года**", "**征税时代 - 《金融与发展》2019年9月号·第56卷·第3期 - 国际货币基金组织季刊**", "**Country Report**" ], "related": [ { "title": "آن الأوان لدفع الضرائب", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2019/september/ar/petrakis.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2019/september/ar/petrakis.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2019/september/ar/petrakis.pdf", "mime": "application/pdf" } }, { "title": "Momento de tributar ● Finanzas y Desarrollo ● Septiembre de 2019", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2019/september/es/improving-tax-collection-in-greece-petrakis.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2019/september/es/improving-tax-collection-in-greece-petrakis.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2019/september/es/improving-tax-collection-in-greece-petrakis.pdf", "mime": "application/pdf" } }, { "title": "Improving Tax Collection in Greece Petrakis", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2019/september/fr/improving-tax-collection-in-greece-petrakis.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2019/september/fr/improving-tax-collection-in-greece-petrakis.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2019/september/fr/improving-tax-collection-in-greece-petrakis.pdf", "mime": "application/pdf" } }, { "title": "Greece’s Chief Tax Collector is on a Mission to Improve Compliance – IMF F&D", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2019/september/improving-tax-collection-in-greece-petrakis.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2019/september/improving-tax-collection-in-greece-petrakis.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2019/september/improving-tax-collection-in-greece-petrakis.pdf", "mime": "application/pdf" } }, { "title": "課税強化に挑む時　マリア・ペトラキス著　ファイナンス＆ディベロップメント 2019年9月", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2019/september/jp/petrakis.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2019/september/jp/petrakis.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2019/september/jp/petrakis.pdf", "mime": "application/pdf" } }, { "title": "Налоги: время перемен – Финансы и развитие – сентябрь 2019 года", "role": "document", "sourceUrl": "https://www.imf.org/-/media/files/publications/fandd/article/2019/september/ru/improving-tax-collection-in-greece-petrakis.pdf", "summary": { "path": "/-/media/files/publications/fandd/article/2019/september/ru/improving-tax-collection-in-greece-petrakis.pdf.md", "mime": "text/markdown" }, "binary": { "path": "/-/media/files/publications/fandd/article/2019/september/ru/improving-tax-collection-in-greece-petrakis.pdf", "mime": "application/pdf" } }, { "title": "征税时代 - 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