Greece Will Miss 2012 Tax Reform Targets — EU/IMF Report

By Stelios Bouras

Greece will miss tax reform goals set for this year and needs to do more to chase down wealthier tax cheats, a report by the country’s international creditors said Monday.

Greece isn’t seen achieving five out of ten goals set for December in relation to audits and tax collection, the report said, adding that changes to the legal framework and collection methods could give a major boost to revenues.

“Considerable arrears remain on the books — €53 billion ($69.9 billion) — of which most likely 15 to 20% could be paid,” said the report prepared by the International Monetary Fund and the European Union.

Greece could boost revenues by implementing systems that automatically deduct money owed to the state from taxpayer’s banks accounts, the report added.

It comes as Greece prepares to vote next month on a new tax bill long promised to international creditors in an effort to increase budget revenue, simplify the tax system and curb evasion.

The bill, which imposes higher taxes in wages and pensions and reduces tax brackets from eight to three, aims to generate more than €1 billion of additional revenue annually from 2014 and is part of a €13.5 billion austerity package that the Greek parliament passed in early November.

It was seen as a precondition from the country’s European peers in order to unlock the badly needed next aid tranche, but the high taxation also threatens to deepen the country’s brutal recession and destabilize its fragile politics.

available at http://blogs.wsj.com/eurocrisis/2012/12/24/greece-will-miss-2012-tax-reform-targets-euimf-report/