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Country Rankings - Greece

  • May 08, 2018   Greece: risky

    Greece, on the other hand, is in urgent need of a tax overhaul, at least in the opinion of the International Monetary Fund, the OECD, and other international quasi-governmental organizations. Indeed, can there be a tax regime that's had more words written about it in the last few years? Even more, I would venture, than Japan's consumption tax. And that's saying something. But, if you're attempting to get up to speed with the Greek crisis at least the taxation aspects of it I could be about to save you a considerable amount of time. Essentially, all the coverage boils down to the following sentence: Greece needs to crack down on tax evasion and broaden its tax base. This, essentially, was the conclusion of the OECD's latest report for the country, published in April, which said that Greece's tax system still relies on high rates and narrow bases mainly due to tax evasion. It recommends further action to fight tax evasion through improved risk analysis, targeted tax audits, and strengthened incentives to encourage voluntary tax compliance. In short, much the same conclusion as the other innumerable reports on the Greek crisis. Indeed, if you swapped this report with one written in about 2010 or 2011, and scribbled out the date, few people would notice. Still, there are some green shoots of economic recovery appearing in Greece after a long and grueling slog through fiscal austerity. Nevertheless, for investors, the country must represent a risky place to do business. As the country's creditors continue to apply pressure for tax reforms, this means taxpayers never quite know what changes might be lurking around the corner.
    Source: https://www.tax-news.com/news/Ambitious_Tax_System_Changes_Still_Necessary_In_Greece_OECD____76759.html

  • Sep 13, 2017   Greece: vulnerable

    This survey was also significant because it canvassed the views of the ship management sector in Greece. It's one of the country's most important industries – official statistics reported in 2015 said that shipping and associated industries contributed 7.5 percent to Greece's gross domestic product. However, 69 percent of respondents saw Greece's regulatory environment as a disadvantage, with tax matters cited as a negative factor by 62 percent. That the majority of ship management firms place favorable taxes and regulations top of their wish lists should give the Greek Government cause for concern, because Greek fiscal policy remains hugely constrained by the debt crisis, and the need to maintain an austerity footing. On the other hand, one could ask why the industry hasn't yet jumped ship (ahem) and paddled off en masse to territories with more benign fiscal climates. Perhaps things aren't as bad as they're being made out to be. Nevertheless, this issue does underline how vulnerable the Greek economy remains in a volatile world where change is becoming the norm.
    Source: https://www.tax-news.com/news/Greek_Shipping_Firms_Unhappy_With_Tax_Regime____75172.html

  • Apr 20, 2017   Greece: neglectful

    From one end of the fiscal scale to the other now. And how exactly do you solve a problem like Greece? Well, all I can say is, I'm glad I'm not the one who has to try! It does seem fairly obvious though that part of the problem is that Greece doesn't collect enough tax. Now, I'm all for low taxation of course. And I think raising rates of tax in Greece will, for the most part, be counterproductive. Because not only will this endanger the nascent economic recovery, but probably encourage yet more tax avoidance and evasion in a country that seems to have transformed tax dodging into an art form the amount of tax evaded each year in Greece can be as much as 14 percent of gross domestic product, according to EY. What seems to be the root of the problem is a narrow tax base and relatively high tax rates. If the burden was spread more evenly across the tax base, the Greek Government could possibly collect more revenue while lowering taxes to encourage growth. It's a policy that the International Monetary Fund (IMF) for one is keen for Greece to implement, having called for such repeatedly in recent months. And while it's not going to list Greece out of the crisis in a hurry, it would probably help. That such measures haven't been put in place yet, seven years after the crisis began, is surely a major failing of the bailout program. Indeed, under the agreement reached by Greece to secure further bailout funding, this important condition won't begin to be met until 2020. Ancient Greece was famous for its theatrical tragedies, but this modern version has already turned into an epic.
    Source: http://www.tax-news.com/news/Greece_Agrees_To_Widen_Tax_Base____73960.html

  • Dec 01, 2016   Greece: insanity

    It could be said that most things tried by successive Greek governments and the international community to save the Greek economy have either not worked, or made things worse. Take for example attempts to reduce tax evasion and avoidance, a crucial plank of Greece's recovery plan. According to a recent analysis by business advisory firm EY, it could be still as high as nine percent of gross domestic product, or roughly EUR16bn per year. For those of us living in the world's large economies and used to much bigger macroeconomic numbers, if the amount of tax evaded in the United States was the equivalent of nine percent of GDP annually, that figure would be a staggering USD1.6 trillion, give or take a few billion. However, the Internal Revenue Service recently put the US "tax gap" at USD385bn, which, although a huge sum on its own, puts the scale of the Greek problem with tax evasion into context. So what's going wrong? According to EY, an inefficient, complex tax system is one contributory factor behind the high levels of tax evasion. This, theoretically, can be fixed. However, the political will seems to be lacking. Another reason is the rising tax burden. However, this policy won't be reversed unless Greece's bailout creditors allow it. Such a course would take a radical, almost unthinkable, reversal in the approach taken to the Greek crisis by the "troika," and the international community. But we are living in a period of radical political change, so the possibility that a fresh approach to the Greek crisis may materialize is not out of the question. President-elect Trump is expected to question the IMF's role in bailing out Greece as the soon-to-be leader of by far the largest contributor to the Fund. What's more, we are likely to see a change of leadership in France next year, and possibly Germany too. Doing nothing is clearly not an option when it comes to Greece. But perhaps it's time for a change of plan, and that might be closer than we think. After all, isn't the definition of insanity repeating the same action time after time and expecting a different result?
    Source: http://www.tax-news.com/news/Tax_Evasion_In_Greece_Remains_High____72774.html

  • May 16, 2016   Greece: benighted

    From Brexit to Grexit. And how odd it is that, putting aside the touchy subject of freedom of movement, Britons would probably struggle to tell you how their daily lives are supposedly made miserable by the UK's EU membership. Yet, enough of them want out to make the upcoming referendum very interesting. By contrast, most Greeks have been living in a waking nightmare of tax hikes, cut backs, job losses, and recessions for the last six years, largely as a result of EU policies, but the majority of them want to remain. If the roles were reversed, and the UK was subject to the privations visited on the Greeks, the referendum would be a foregone conclusion no debate to be had! There's no space here to reflect on the reasons why the majority in Greece are prepared to suffer to stay in the EU, but it must be an indication of their desire not to go back to the "old" Greece, which experienced devaluations and high inflation under the drachma. But how much longer will Greece be prepared to tolerate the suffering? When will the Greeks get their country back? It's impossible to answer these questions with any certainty, but if they are determined to scale the mountain under the direction of the EU, then the journey will be a long and arduous one. The Greek Parliament's recent approval of tax and pension reforms, designed to secure funds to meet an upcoming debt obligation, shows this. These reforms will generate an estimated EUR3bn in revenue, which is a trifling amount when set against Greece's overall debt. Indeed, it is effectively using the money it is borrowing to repay debts to the same lenders. Not so much robbing Peter to pay Paul, as borrowing from Peter to repay Peter. Something that the EU and other members of the troika must be well aware of. But still their approach won't change. It's almost as if the EU were a giant automaton, incapable of acting differently unless someone reprograms its computer. It's why large swathes of the population of Europe are turning against the EU, and perhaps it will take something like a Brexit for the code to be changed. For poor old Greece though, the light at the end of the tunnel must be very dim and distant.
    Source: http://www.tax-news.com/news/Greek_Tax_Reform_Plan_Approved____71172.html

  • Mar 01, 2016   Greece: dangerous

    The European Court of Auditors, which acts as the European Union's spending watchdog, has concluded following a review of technical assistance provided to the Greek Government that the program has produced "mixed results." Well I don't know about yours, but my socks certainly weren't blown off by this revelation, being pretty obvious even to the most casual observer. Apparently, the major objectives of the task force were to improve public administration, improve the Greek tax system, and bring about a return to growth by fostering the country's business environment. I suppose you could say that some progress has been made on achieving these three goals. Tax revenues have been increasing, the budget deficit falling, and the economy will only have shrunk by 0.7 percent in 2015, according to recent estimates. But to turn the Greek economy around with mere technical assistance was always going to be a tough ask for the task force, particularly given that, as the Court of Auditors report relates, it was set up rather hastily and lacked a clear remit with defined objectives. Indeed, as Lord Mervyn King, who was Governor of the Bank of England for 10 years until 2013, warns in a new book, extracts of which have been published by the UK's Daily Telegraph, action of a much more seismic magnitude is going to be required now to save Greece, and certain other vulnerable countries on the periphery of the Eurozone, from what looks like a never-ending cycle of bailouts and crushing austerity – and that is to allow them to leave the Euro zone and plot their own course back to growth. While he acknowledges that such an event could cause economic chaos in the short-term, in the long-term, Grexit (and perhaps Pexit, Spexit and even Itexit), is going to be the lesser of two evils. Lord King goes on to observe that the current policy of monetary transfers and forced austerity has exposed a democratic deficit between the EU's bureaucratic "elites" and ordinary taxpayers, leading to a rise in populist parties on the Left and the Right, a development he warns is potentially "dangerous."
    Source: http://www.tax-news.com/news/EU_Reviews_Impact_Of_Task_Force_For_Greece____70446.html

  • Feb 15, 2016   Greece: ducks

    Now back to harsh reality, and it doesn't take a genius in economics to work out that putting up taxes in a sinking economy is hardly going to be a recipe for economic success. Unless, that is, you are of a technocratic bent and work for a central bank, probably located in Frankfurt. It was somewhat refreshing therefore, to read the contents of a working paper from the European Central Bank, which came to the not completely unsurprising conclusion that tax hikes are unlikely to reduce a nation's debt if those tax hikes merely exacerbate that nation's economic problems. In short, austerity taxes are usually self-defeating. The uncomfortable truth, according to the conclusions of the working paper, is that cuts in government expenditure have a far more powerful effect on the fisc than increases in taxation. But governments don't want to hear that do they? Indeed, if you were talking to a group of Eurozone treasury ministers (I wonder what the collective noun is for that – a "fudge" perhaps...) about the ECB report, at this point they would probably cup their ears with their hands, and wail "blah, blah, blah! I'm not listening! I'm not listening!" So who do I execrate? Portugal has ruffled feathers in Brussels by proposing to ease austerity taxes in its draft budget for 2016, which is worthy of an encomium on its own. Greece, on the other hand, is proposing to tax its way out of the crisis by raising social security contributions and establishing a new 50 percent top rate of personal income tax. This is so the Government can water down extremely unpopular – but money-saving – reforms to the public pension system. I can see exactly why this proposal appeals. It's asking the rich to pay their share towards Greece's rescue, rather than some of the country's most vulnerable inhabitants. But the Tsipras Government is as a result falling into the same trap highlighted by the ECB report i.e. it is hiking tax to duck politically poisonous decisions on spending. It's far from the first time a government has looked for the easier option, and it certain won't be the last.
    Source: http://www.tax-news.com/news/Greece_Proposes_50_Percent_Top_Rate_Of_Tax____70370.html

  • Aug 24, 2015   Greece: plunging

    It turns out that the tax measures foisted on Greece as a condition of its latest bail-out are more extensive than first thought. But I maintain my position that this so-called rescue package is going to be in vain and Greece's creditors may be chucking good money after bad. I fail to see how sufficient sums of revenue will be raised and Greece's debt obligations met from a shrinking economy that is already one-third smaller than it was at the start of the crisis. Economically, Greece is well and truly stuck between the devil and the deep blue sea, between ever harsher and self-defeating austerity, and the journey into the unknown represented by the "Grexit." The problem is, while the Greeks don't want the former, they have been mostly unwilling to contemplate an EU exit too. But there are signs that that sentiment is changing. Former Finance Minister Yanis Varoufakis prepared a plan in secret for an orderly exit from the euro, a contingency for if talks between the EU and Greece broke down irrevocably. And now the breakaway left-wing Popular Unity Party is saying that the Grexit wouldn't be the catastrophe some people fear, if it were managed correctly. It might all go wrong, but then again Greece has a chance of redemption if it does decide to take the plunge – and that's got to be better than eternal misery.
    Source: www.tax-news.com/news/Greeces_Third_Bailout_Measures_Agreed____68902.html

  • Jul 20, 2015   Greece: tragic

    So what was the point of all that then? I refer of course to the humiliating conclusion for Greece in its attempt to renegotiate its bailout terms. Almost unbelievably, after six months of deadlock and brinksmanship, Athens has seemingly managed to secure itself worse terms than those it originally protested against, and significantly worse ones than were on the table just a short while ago. I keep reading and hearing in the media that Greeks will be subjected to harsh new tax rules as part of the agreement. It's certainly true that the screw will be turned ever tighter on tax evaders. However, the statement summarizing Greece's obligations, which was released after the Euro Summit on July 12, barely mentions the word "tax." In fact, taxation is referred to twice, and both references are vague in the extreme: streamlining the VAT system (presumably this means removing the VAT breaks bestowed on the Greek islands and reduced rates) and broadening the tax base to increase revenue. In any other country, the goose will be barely heard to hiss. In Greece, however, the hisses are being drowned out by the howls of anguish at the agreement's other terms. There's not the room to go into all the gruesome detail here, but, to summarize, the stipulations are the very antithesis of what a left-wing party like Syriza stands for, so it is hard to see how the current coalition will hold together. They include: removing labor rights; cutting pensions; and privatizations, to name a few. Indeed, the latter of these three is particularly contentious because it essentially entails the flogging off of state assets, with the proceeds flowing into a fund to pay Greece's creditors (i.e. mainly Germany). In fact, the origins of the privatization fund tell a story in itself. Initially it was proposed that the fund would not be located in Greece at all, but somewhere else (Germany, perhaps?), as if Greece were some kind of undisciplined trust fund brat who couldn't be relied upon not to blow the money. But that was a humiliation too far for Athens, and in a rare concession by Angela Merkel, the fund will now be established in Greece under the supervision of "relevant European Institutions." Nevertheless, it illustrates just how much control over its own destiny Greece appears to have ceded to foreign powers. If you're wondering why I keep mentioning Germany, it's because the country is Greece's largest EU creditor and Europe's largest economy, so it's calling most of the shots here. One economist has actually proposed that the German Government should just increase the solidarity tax – the mechanism currently funding development in eastern Germany – by 2.5 percent, transfer those revenues to Greece, and dispense with the tortuous procedure of negotiations and bailout loans. But that would be far too simple, wouldn't it. And it would be far too transparent for the German Government's liking – Germany's taxpayers would realize the extent to which they've been propping up Greece.
    Source: http://www.tax-news.com/news/Greece_Bailout_Deal_Agreed____68615.html

  • May 12, 2015   Greece: teetering

    Another policy that looks to be proliferating around the world is the tax amnesty. Just last week, we reported Greece's new tax amnesty plans on the same day that Indonesia introduced a one-year tax amnesty. Last month, Puerto Rico enacted another tax amnesty law and the Ukrainian Government announced that its tax amnesty, introduced in January this year, had resulted in over 3,000 applications. In March, the Russian Parliament approved a draft offshore amnesty law, and the Seychelles confirmed a tax amnesty that same month. At the end of January, Ireland launched a five-month tax amnesty, and Australia's offshore tax amnesty concluded in December 2014. You get my drift. On the question of whether tax amnesties are good things or not, the jury is still out. Some say they merely encourage non-compliance, especially if they are wheeled out by governments on a regular basis – Italy is probably a prime example. And why is it that those who play by the rules never seem to get a break? On the other hand, the benefits of an amnesty in tax revenues must outweigh the cost in terms of investigating and prosecuting suspected tax evaders. However, I really want to talk about Greece rather than amnesties in general, because its tax amnesty is symptomatic of the nation's increasing desperation to stay afloat. The Greek tax amnesty comes in response to collapsing tax revenues, a trend that began when Syriza came to power, perhaps because people think they will be let off their tax debts when the new Government reaches a more favorable bailout deal with the troika. After months of negotiations however, it looks to be more a case of if Greece can strike a deal, rather than when. And it's a mighty big if. Looking back, the notion that Greek Finance Minister Yanis Varoufakis would breeze into the talks with hard-nosed technocrats from Berlin, Frankfurt, Brussels, and Washington (home of the IMF), attired in his snazzy open-collared shirt, and come away declaring an end to austerity, now looks quite ridiculous. However, Greece must be running out of time. Recent signs, if any more were needed, that the country is edging closer to the precipice include the new tax on cash withdrawals - an attempt to prevent a run on the banks - and raids on departmental budgets to meet its latest debt payments. It's interesting that the EU is being particularly stubborn, refusing point blank to give Greece some slack. Certainly, it wants to avoid setting an austerity-relaxing precedent. But pushing the country closer and closer to the Grexit isn't in the EU's interests either, as it will be tantamount to admitting that the euro experiment was a failure. So with Greece seemingly on the brink, surely something will have to give one way or another soon.
    Source: http://www.tax-news.com/news/Greece_Announces_Tax_Amnesty_Plans____67975.html

  • Mar 19, 2015   Greece: last legs

    It was never quite clear whether an independent Scotland would have been permitted to join the EU or not. But now we turn to Greece, a country which can't seem to leave it – the monetary part of it at least – even though in the long term the "Grexit" might be in everyone's best interest, including Greece's – and Germany's long-suffering taxpayers. Whatever happens there is going to be short-term pain. But persisting with the status quo merely locks Greece into a downward recessionary cycle with no sign of light at the end of the tunnel. As far as Germany is concerned, endless austerity is the only option. This is because loosening the bonds of austerity and letting Greece do its own thing sets a dangerous precedent. Spain and Portugal are far from out of the danger zone, and Ireland has some way to go before confidence is fully restored. Italy is a constant worry also. The real elephant in the eurozone room though is France, and the fallout from the eurozone's second-largest economy falling into the same sort of trap doesn't bear thinking about. Not only this, Angela Merkel would hardly relish the prospect of explaining to Germany's taxpayers just why they have been chucking good money after bad year after year. And, of course, cutting Greece adrift from the currency union would be an effective admission of its failure, which the eurozone's leaders seem keen to avoid at all costs. If you're wondering why I'm not talking about tax, it's because where Greece is concerned, there's almost no point anymore. And that is because Syriza's tax plans almost seem insignificant in relation to the more fundamental problems it faces. It's difficult to envisage how they are going to make that much of a difference anyway. Yes, restore personal tax allowances by all means, that will put a little bit of money back into the pocket of working Greeks. And sure, tax the wealthy and their properties and their chattels. A bit of class-driven schadenfreude will certainly make people feel better. But in a country with a population of 10m, how much will these new wealth and property taxes realistically raise? A billion? Probably not even that. Yet another attempt to crack down on tax evasion, especially by the rich, was inevitable, which could bring another billion or so into the coffers. Syriza also has ambitions to slash VAT by 8 percent, which is a laudable idea, but is going to put a serious hole in tax collections unless consumer spending recovers so much that revenues actually go up. Unlikely. Besides the idea is totally unrealistic while the EU still has a say over things. The reality is that tax measures are going to have a limited impact because a quarter of the population are out of work and not paying tax (youth unemployment is 60 percent), and the economy is a third smaller than it was when the crisis began and is still shrinking. Not being a trained economist, I'm not really sure what the answer is to the Greek problem. Then again, Greece is now being run by a bunch of economists and not much has changed. But I do know that something will have to give sooner rather than later.
    Source: www.tax-news.com/news/Greece_Negotiating_Tax_Reforms_In_Brussels____67488.html

  • Jan 22, 2015   Greece: crunch time

    Well, it looks like crunch time is approaching for Greece. Again. Voters go to the polls on Sunday in a snap election called by Prime Minister Antonis Samaras late last year which the left wing anti-austerity party Syriza looks set to win, according to opinion polls at the time of writing. What does this mean? Well, nobody knows for sure. Syriza's leader, Alexis Tsipras, thinks he can put an end to the four years of crushing austerity policies which have stifled Greece and locked it into a long-term recession while keeping Greece's international creditors happy and ensuring the country remains in the eurozone. This is probably music to the ears of a former public sector worker who lost her job as a result of spending cuts, or the small business owner facing a daily battle against the odds to stay afloat, and who can blame them? However, Syriza's platform sounds to me like the sort of "all things to all people" approach to government that helped to get Greece into this mess in the first place. And perhaps it is equally criminal to offer the people false hope. As a result, Samaras and his ministers have been filling the airwaves with warnings of Syriza's dangerous complacency with regards to the crisis. It is a strategy that is backfiring, however, as it has merely drawn attention to the precariousness of Greece's situation. Questions are being asked about how the Government, whoever is in charge of it, will meet EUR4.3bn of debt due in early this year, with threadbare reserves and without the support of new funding from the "troika." Syriza thinks it can bridge the gap by getting local banks to buy short-term bonds. Really? Apparently, about EUR3bn has been withdrawn from Greek banks by nervous depositors in the last two months alone, and last week it emerged that two of Greece's largest institutions have requested access to the ECB's "emergency liquidity assistance" program via their the Central Bank. So Tsipras might have to think again. What's more, clearly spooked, the markets are speaking, and their prognosis isn't good, with the cost of Greek Government debt once again on the rise. However, it's Samaras and his Government that get the execration here, with a promise to cut taxes if voters reward them with another term. If it sounds unrealistic it's because it probably is. What a very dangerous time to be playing politics!
    Source: www.tax-news.com/news/Greeces_Prime_Minister_Promises_Tax_Cuts____66961.html

  • Nov 06, 2014   Greece: computer savvy

    It's not easy to find positives where Greece is concerned, but this benighted country, which could be teetering on the brink of economic oblivion once again, came out surprisingly well in a recent report on the taxation of ICT goods and services - computers, cell phones, tablets, internet access and an array of other digitally-delivered services - around the world. While other industries continue to contribute more taxes to help pull Greece out of its fiscal Slough of Despond, the ICT sector is getting away rather lightly according to the report by the Information Technology and Innovation Foundation, which found that Greece is the only OECD country to feature in the top-20 of its league table, with an overall tax and tariff burden of less than 10 percent. Tragically, but at the same time unsurprisingly, the countries with the highest "digital drag" - those with the largest tax burdens on ICT goods and services - are mostly lower- or middle-income countries located in Africa, South Asia, and South America, with sub-Saharan nations prominent among them, i.e. those countries that would benefit the most from the productivity gains accruing from greater use of technology and the resultant economic growth. It is estimated that in countries with the highest tax and tariff rates on the ICT sector, annual GDP-per-capita growth is reduced by between 0.7 and 2.3 percent. The report points out that governments like to slap tariffs on ICT goods in the vain belief that it will spur domestic production of these goods. All that tends to happen as a result of such policies though, is that the local population is deprived of choice and forced to pay through the nose for sub-standard products. That's progress!
    Source: www.tax-news.com/news/Report_Charts_Global_Tax_Rates_On_IT_Goods_And_Services____66252.html

  • Jun 02, 2014   Greece: will have jam tomorrow

    In Russia, they dream in winter; but in Greece they dream in summer. Because it's too cold in the first case, and I suppose because it's too hot in the second. At all events, Prime Minister Antonis Samaras is promising to reduce all types of tax over the next few years, and predicts EUR55bn of incoming investment over the same period. There are a few inconvenient factlets standing in his way, however, and we won't even consider the fractured state of Greek politics. First, GDP has shrunk by more than 25 percent since recession hit in 2008, and continued to fall in the first quarter of 2014; second, the unemployment rate increased in the first quarter of 2014 to about 27 percent, and in the 15 - 24 year age group is running at 57 percent; third, Greece has been provided EUR240bn of assistance from the Troika, and now has national debt equal to 175 percent of GDP and rising, with debt service even at today's artificially low rates running at 5 percent of GDP annually. Net FDI in 2013 was under EUR2bn. Now I hate to be a Cassandra, truly I do, but it is an existential impossibility for Greece to escape from this trap, this year, next year, or ever, unless it is bailed out once again by the Troika. The expectation of such a bail-out on the part of investors is what permitted Greece to raise EUR5bn on the international debt markets at "only" 5 percent interest late last year, a figure which is still double the average 2.5 percent rate Greece is paying on its debt. The EU cannot afford to rescue Greece again, even if there was willingness to do so; but they're mad enough in Brussels to try it, nonetheless, unless they're stopped by the recently elected eurosceptic body of MEPs. So the EU is between a rock and a hard place: either the Troika takes further steps down the primrose path towards bankruptcy for the euro-zone, or the eurosceptics force a halt to the endless creation of money to bail out already-bankrupt individal member states such as Greece. Either way, it looks as if the euro has had it! The government of any sane member of the eurozone should recognize this, and jump now; but they won't, because they are politicians, and they don't want to the ones who "lost" the euro. So they'll continue dreaming until their rude awakening. It may be this year, or it may be next year, but it will come, and by now there is nothing that can stop it. Why then am I giving a bouquet to Mr Samaras? So that he can throw it on his country's coffin, that's why!
    Source: http://www.tax-news.com/news/Bold_Tax_Cuts_In_Greek_SevenYear_Plan____64830.html

  • Aug 29, 2013   Greece: waking up

    Finally Greece is showing some faint signs of getting to grips with its dysfunctional tax system, overstaffed, corrupt and ineffective as it is, closing some of the island offices which were running out of control. For anyone coming from a "normal," fairly law-abiding Western democracy, it's hard to get one's mind around the chicanery and outright theft that characterized the old regime. The best model to think of would be the system of "tax-farming" used by mediaeval monarchs: you appoint me to collect your tax of one mark per acre of land; you won't pay me anything because you know I'm going to cheat you of one third of the overall yield, and another third is going to stay in the hands of the tenant, as his reward for letting me steal my portion. Except that under the Greek model (imagine trying to police all those thousands of islands) the tax collectors were paid anyway. So it's no surprise that the tax officials unions are out on strike. Needless to say, the unions' remedy for the situation is to hire yet more tax collectors! The decision of the Greek Government nearly two years ago now to collect its new property tax through electricity bills says it all. And it's still doing it that way. Then came the shocker of the "Lagarde" list, incriminating wide swathes of the governing class, who had been helping themselves to their share of the proceeds of corrupt administration and putting the money in Switzerland. So what did the Government do when it got the list from the IMF? Why, they tore it up, of course! An International Monetary Fund (IMF) report in May identified a need "to remove completely political interference from revenue administration" in Greece. The results of a reasonably impartial inspection of tax-gathering carried out earlier this year showed that up to 85 percent of businesses were evading taxes, particularly of course on the islands. The inspections followed a visit by European Tax Commissioner Algirdas Šemeta to Greece in June. Addressing the Greek parliament, Šemeta called for a "zero-tolerance policy against tax fraud and evasion," and he complained that progress toward improving debt collection and the auditing of wealthy taxpayers remained slow.
    Source: www.lowtax.net/asp/story/front/Greece_Closes_More_Tax_Offices____61831.html

  • Jul 25, 2013   Greece: still in hot water

    I'm searching in vain for ways to reward countries this week: no-one has reduced taxes; no government has said that it is reducing the number of tax audits it carries out because companies are becoming more accurate and open; and not one uncivil servant has been fired, although the Greek Parliament has reluctantly agreed to swallow some of that medicine – not of course because it wants to or believes in making savings, but simply in order to get hold of the next, EUR6bn tranche of bail-out money which it won't otherwise receive. Needless to say the Unions immediately called a general strike. How many is that in the last couple of years? Probably the casualties will all be hired back again on short-term contracts anyway, in a way that won't be obvious to the Troika. Given the number of ways in which the Greek Government is choosing to defy the Troika, for instance this week through its continued provision of illegitimate subsidies to the State gaming sector, it is difficult to think that the Government has changed its ways to any significant extent. How do you repair a broken governance model? It's reasonably straightforward for a company: the shareholders sack the Board and put in an improved version. But with countries there is this inconvenient thing called democracy, and the ability of governments to bribe the electorate in countless minor and major ways, until the whole body politic is rotten. That unfortunately is the case with Greece, and no amount of visits from Brussels "suits" is going to get at the real problem. I don't know what will; it's depressing.
    Source: www.lowtax.net/asp/story/front/Greece_Referred_To_EU_Court_Over_Casino_Tax____61466.html

  • Apr 18, 2013   Greece: mistreat China

    One country which is conspicuous by its absence from the TPP talks is of course China. Although there are ongoing negotiations between the Middle Kingdom and various other countries, and China has FTAs with a scattering of other countries, notably including ASEAN and New Zealand, on the whole it is lagging. And it considers itself as an injured party in trade affairs, complaining this week about the level of "dumping" and "counter-vailing" measures it is subject to, particular emanating from the USA. A lot of the problem revolves around the designation of China as a "non-market economy" (NME). For anyone who, like me, finds it extraordinary that China should still be regarded as an NME, a word of explanation is in order: an NME is a country in which the State subsidizes enterprises or indulges in other non-market behaviour, despite WTO rules against it. So, an NME is allowed to cheat, if you will; but the other side of the coin is that for an aggrieved counter-party, the burden of proof is lower in anti-dumping proceedings. China's accession agreement to the WTO allows it to retain NME status only until 2015; but the change is not in China's gift, and both the USA and the EU persist in regarding China as an NME, despite frequent requests from China for them to treat it as a market economy.
    Source: www.lowtax.net/asp/story/front/China_Sees_Itself_Subject_To_Increasing_Trade_Friction____60398.html

  • Mar 07, 2013   Greece: lands a big fish

    Nice to see the Greeks getting something right, for a change, giving a tax concession on import VAT to Hewlett Packard at Piraeus. They wouldn't be allowed to give it only to HP of course, since that would be state aid and the Commission would be down on them like a ton of bricks within seconds. So any firm can qualify if its imports are over a threshold which has been set so high as to exclude everyone else. Clever those Greeks. Even so the Commission is probably scratching its collective head over the scheme: there have been previous tax breaks for operators at Piraeus which got pretty close to the line, and the Commission is still investigating some of them. Of course this is exactly the kind of thing that Greece needs to do in order to pick itself up from the floor, and to me it's crazy that in the face of Continent-wide recession and lack of competitiveness, Brussels bans the very types of competition that actually might make a difference. In US terms, it would be as if Nevada was forced to levy a 5% corporate income tax because other states did so.
    Source: www.lowtax.net/asp/story/front/Piraeus_VAT_Breaks_To_Foster_Transhipment____59975.html

  • Jan 31, 2013   Greece: plays solo

    I can't believe that the Greek government is behaving so badly over its new gaming laws and the state gambling monopoly, OPAP. It's as if the minister responsible and the whole state gambling apparatus are inhabiting a parallel universe with no communication passing between them and the rest of the administration. They are flagrantly breaking settled EU law despite repeated complaints from Brussels and the European gaming industry. Just this last week the European Court of Justice ruled against the regime, even as it was before the latest law was passed, which actually makes the situation worse. I can only imagine that the government is so fixated on spending the money foolishly donated to it by the troika that it has no time for anything else. What else can explain it?
    Source: http://www.lowtax.net/asp/story/front/Industry_Planning_Greek_Gambling_Regime_Challenge____59328.html

  • Dec 06, 2012   Greece: in the dog-house

    As regards betting and gaming, the behaviour of the Greek government over its state gambling monopoly, OPAP, is a straw in the wind. It's not nice to kick a person when they're down, and Greece is nothing if not down, but this kind of cynical disregard for private business and market principles is what brought Greece down in the first place and is very reprehensible. Betfair is exasperated by the situation and has thrown in the towel. Not that Greece is the only country in Europe which is trying to retain its gambling revenues by fair means or foul. The Commission and the ECJ will probably head off the more overtly protectionist national monopolies; the worry for Malta, Gibraltar, Alderney and other e-commerce front-runners is that the EU's big taxers will then follow the UK by installing anti-competitive gaming tax regimes which fly in the face of single market principles - and it's far less clear that the Commission will spring to the market's defence, as it should.
    Source: http://www.lowtax.net/asp/story/front/EU_Urged_To_Challenge_Greek_Gambling_Legislation____58508.html

  • Aug 30, 2012   Greece: would you buy an island from this man?

    We have to give Greece an encomium for suggesting that it might sell islands in order to raise cash. Of course it would be political suicide, given how attached the Greeks are to their land, but it makes a good sound-bite in Brussels, being presumably the intended audience. Just in case they're serious (they aren't), here are a few suggestions: don't ask for payment in euros or drachmas, use Swiss francs or dollars, or possibly renminbi; appoint Goldman Sachs to hold the auction; give 30-year leases with a full tax holiday, guaranteed planning permission and unlimited work permits for non-EU citizens; allow casinos. You see how impossible it all is: the EU wouldn't allow a single one of those. The best thing for Greece is the Grexit and by now you have to be really perverse not to recognize it.
    Source: http://www.lowtax.net/asp/story/front/Greece_Says_It_May_Sell_Islands____57025.html

  • Aug 02, 2012   Greece: slips away

    It's unfair to kick a man when he's down, let alone a woman, and countries are female, for some obscure reason, in most languages. But we have to be hard-hearted here and say that, as a home for business, Greece is going from bad to worse. The new government is no more capable of taking difficult decisions than any of the previous ones, so the ineluctable slide towards a Grexit continues. I don't need to remind you that I have been in favour of this outcome for two years at least, and once it has happened, a new currency has been established, and the immediate shockwaves have died down, there will be wonderful opportunities for inward investment, particularly in the tourism and transportation sectors. But that's not yet. Right now, the only possible advice is: don't go there!
    Source: http://www.lowtax.net/asp/story/front/Greece_Fails_To_Unite_On_Vital_Savings_Plan____56556.html


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