04 June 2013

Commissioner Šemeta calls for strengthening tools for decision-making that can support recovery in Greece

Speaking at the Hellenic Parliament on Greek tax reforms, Šemeta said "There are road-signs that Greece... should follow in implementing its tax reforms. We can already see movement in the right direction. However, there is a long road still to be travelled."

We can already see movement in the right direction. For example, the newly-created post of Secretary General for Public Revenue is a good initiative. This offers focused leadership to drive forward essential changes and to steer a more effective the tax administration with the necessary level of autonomy.

Likewise, positive steps have been taken to simplify and modernise tax legislation. The new Tax Codes, for example, will put in place more modern procedures, in line with international standards. The impact these can have in facilitating businesses in paying their taxes, and the administration in collecting them, is enormous. However, there is a long road still to be travelled before Greece has a tax system that can be considered fully fit for purpose.

One priority must be to cement the new organisational structure of the tax administration, and ensure that it is adequately staffed with professional, well-trained and reliable personnel. Another priority must be to improve the actual collection of taxes.

On one hand, simplified structures and rules, and improved administration, will facilitate compliance. But Greece must take a tougher stance against those who seek to escape paying what they owe. Better debt collection and better auditing of wealthy tax payers have been two areas of primary focus in our technical assistance to Greece.

But I fear that progress is still too slow. I know that legislation has been developed and new "mass recovery tools" have been designed to address these issues. But these need to be accompanied by strong political will to implement all necessary measures and to collect what the public purse is legitimately due. That is the only way that Greece can move away from a system where the tax burden falls disproportionately on wage earners and pensioners, and is too lenient on the rich and self-employed. It goes back to the issue of fair taxation.

Tied to this, Greece also needs a zero-tolerance policy against tax fraud and evasion. You will have seen the clear call from EU leaders two weeks ago for real and concrete progress to be made – and made quickly –to tackle these pervasive problems as a Union. Certainly, Greece can both contribute to, and benefit from, stronger measures against evasion and avoidance at EU level.

As an illustrative example, I would just mention that the revised EU Savings Directive and a stronger EU-Swiss savings agreement alone could return billions of euros to national treasuries. Here, there is an opportunity for Greece to reinforce its fight against tax evasion at home – which does need reinforcing – by marrying it to actions being taken at EU and global level. For example, I welcome your intention to strengthen Anti-Abuse Rules to avoid profit shifting, and would urge you to do so in line with the one we have proposed in the Recommendation on Aggressive Tax Planning. I would also encourage you to rapidly implement the other measures in this Recommendation, as well as the actions we have proposed against tax havens.

Further strengthening existing anti-money laundering tools would also greatly assist in identifying tax evaders and freezing their assets. The Commission has contributed greatly to the technical assistance to Greece in fighting corruption, and will continue to do so.

Full speech

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