The culture of countries within the European Union differ widely. A prominent characteristic of the Greek culture is not paying taxes. They do this in a big way by paying just over half of their liabilities. Latest estimates show that one reason why Greece has one of the poorest economies in the EU is that some 40% of the gross domestic product falls through the tax net. The Socialist government, which is faced with a huge budget deficit called on advice from the US Internal Revenue Services.
The prime minister, Costas Simitis, who trained as an economist in Germany, accepted the analysis that the main problem of compliance was that taxpayers found it cheaper to divide their payments into two parts, one for the state and one for the taxman. In a bold move to channel all payments into the state coffers he set up an 1800 strong Finance Police with powers to inspect ports, airports, nightclubs and shops. The performance target is to raise tax revenue by 18%.
The move has unleashed resentment among customs officers and tax collectors who claim that the Finance Police have been given too many powers. The situation is compounded by the belief that newly appointed anti sleeze officials are taking their job too seriously and a non co-operation policy has been threatened.Mr Giorgos Kanellopoulos, secretary of the new body, made it clear that he is aware that culture does not change overnight when he said: “We’ve introduced certain internal control measures.”