The occasional initiatives that all Greek governments take to change taxation scare the Greek people before they are even implemented. Very few of the decisions actually benefit the people. On the contrary, even the changes that are positive for the economy end up being against the taxpayers. In a way, this is a bit like bullying.
The only true, real and substantial tax reform was carried out by Dimitris Koulourianos, Finance Minister in the first A. Papadreou cabinet. Mr. Koulourianos introduced the objective real estate value system and instantly put an end to the quarreling between taxpayers and tax-collectors over the true value of real estate. The Koulourianos law provided that irrespective of the price for which a plot of land is sold, the tax payable in based on the plot’s objective value. This provision was enforced for years until a few bright people essentially abolished this method and now, after carrying out a tax audit, they can set their own price, higher than the objective value and demand taxes, fines and interest fees. This example is but a drop in an ocean. Everyone in this country is faced with a medieval tax system and any efforts to change or improve it are crushed against high, invisible walls. The new leadership at the Ministry of Finances must find a cure to a distorted system that brings suffering to the people and ridicules the State as treasurer of public wealth.
Over the years there have been various systems proposed to tackle tax evasion and increase state revenue. The government ought to take stock and decided which of these to strictly implement. It goes without saying that taxation cannot be retroactive.
If we want to see growth the State must finally get serious.
Stavros P. Psycharis
Originally published in the Sunday print edition
