Ambitious Tax System Changes Still Necessary In Greece: OECD
Credit: Tax News
In the OECD’s latest report for the country, Greece has been urged to broaden its tax base and further clamp down on tax evasion.
While praising steps taken by Greece to implement recommendations in its last report, the OECD says 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.
Greece’s narrow VAT base was also criticized, with the OECD observing many exemptions have no social purpose, including exemptions for casinos, betting shops, post office services, and national broadcasting networks, and reduced rates for hotels.
To address the continuing issue of non-performing loans, the OECD recommended banks should be given tax relief to dispose of them. To this end, it says tax incentives under loan servicing and securitization laws should be aligned.
While the report is critical of Greece’s complex tax system, stating it discourages participation in the formal economy and lowers tax compliance, it said the setting up of a new independent revenue agency last year was a big step in the right direction.