Reuters | Aug 10, 2012 2:12 PM ET
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Kostas Tsironis/Bloomberg
Greece depends on aid from the European Union and International Monetary Fund and is trying to show the so-called troika of lenders that it is on the path to reforming itself.
ATHENS ? Greece can raise more money by fighting rampant tax evasion than piling extra spending cuts to convince international lenders to keep it afloat, a senior Greek official said on Friday.
The country has long struggled with patchy tax collection and efforts to reform a tax administration widely seen as corrupt and ineffective have failed to make real progress.
?There is a lot of ?fat? in tax evasion and we can?t keep cutting spending,? Deputy Finance Minister George Mavragiannis told reporters after a meeting between ministry officials and the financial crimes squad.
A finance ministry official who declined to be named said, ?We decided to simplify and shorten the process of verifying an offence and imposing a fine,? adding this would speed up a process that takes up to nine months by two to three months.
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Greece depends on aid from the European Union and International Monetary Fund and is trying to show the so-called troika of lenders that it is on the path to reforming itself.
Finalising 11.5 billion euros in cuts due in 2013-15 is key to a positive review from its lenders, who are due in Athens next month for a final verdict on weather they will keep funds flowing to the austerity-bound country.
The savings are expected mainly from cuts to health, pension and welfare benefits, but officials huddled at the finance ministry on Friday in search of ways to better collect taxes.
Latest official data showed Greece?s state budget revenues over the January-July period rose year-on-year to 13.2 billion euros but fell short of the 14.83 billion euro target, due to lower than expected tax revenues in a contracting economy.
Falling tax receipts further complicate Greece?s efforts to lower its fiscal deficit to 7.3% of gross domestic product this year from 9.3% in 2011.
That task was already a difficult one since Greece is trudging through a fifth year of deep recession that has thrown one in five out of work and shut tens of thousands of businesses.
The full extent of Greece?s tax payment woes will become clear this month when about 250,000 of about 5.5 million tax returns due are completed.
? Thomson Reuters 2012
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Topics: Economy, EU Economy, Greece
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Article source: http://business.financialpost.com/2012/08/10/greece-says-it-must-fight-fat-in-tax-evasion-budget-deficit-shrinks/
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