The tax controlling mechanism is pausing at the most crucial moment

Not even the Finance ministry itself knows the changes it has to make to the tax controlling mechanism, and when it does, new issues arise and the services cannot operate, not even in the defective way they used to do until now.

Just this Monday for example, deputy Finance minister Dimitris Kouselas signed a decision, which “temporarily” assigns the power to control local authorities, public entities, foundations and bequests, to the Body of Inspectors of the Finance ministry.

“Temporarily” though, these functions have continuously been assigned to the Economic Review in the last 5 years, although a law which was passed in 2006 by the then Finance minister Petros Doukas stated that there should have been a special control service to observe the money route from the subsidized institutions.

For 60 months now, occasional ministers and deputy ministers have “temporarily” been extending the old regime rather than applying the law, and now are preparing changes and new responsibilities for the Economic Review with another law that was passed a month ago.

However, the situation remains foggy, because some inspectors are likely to assume control for personal tax statements and administrative and prosecuting investigations in cases of corruption, while others might be assigned inside tax offices in support of the investigations for tax evasion.

Therefore, it is no coincidence that in his meeting with Strauss-Kahn and Paul Thomsen, the finance minister admitted that to complete the changes and have a properly functioning tax collecting mechanism, the country needs at least another 18 months.

In its first 18 months in office, the government has already been servingg courses of inconsistency, timidity, looseness and withdrawal. The famous changes that were passed just now, were supposed to have been implemented during last summer, in order to bear fruit in the fall and be fully functional at the beginning of 2011.

But valuable time was lost, especially for the sake of “underground” games of power with the tax industry – particularly with the trade unionists of PASKE. Now, the “hopes” of a new mechanism have been postponed for the summer once again, with the best chances of proper function moving to late 2011 or early 2012.

But even where these changes took place they have been problematic, like in TAXISΝΕΤ, which was a properly functioning, user-friendly system that had outgrown its “teething problems”; it now leads users back to the tax offices even if the law dictates that it is mandatory to submit tax statements via the Internet. Just yesterday, the submission date for E5 statements was extended (to April 28) following that of balances and E2 and E3 statements. As a result, tax collection has also been postponed resulting in the economic team counting on its inconsistency in order to replace the lost revenue (-8% from last year) with higher tax receipts in the second half of 2011.

But after an 18-month delay, the Special Legislative Drafting Committee (one of PASOK’s pre-election commitments) for the Elimination of the Code of Books and Records (KBS) is also “going ahead”. The Committee will meet today, Holy Wednesday, for the first time and will work on drafting a recommendation for the abolition of the Code of Books and Records, with the exception of any necessary provisions to be included in the Income Tax Code or other tax law.

However, a relevant decision to encode and simplify disparate tax provisions, numbering half a thousand laws and more than 10.000 decrees and regulations, still remains on “the wayside”.