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European Commission

Algirdas Šemeta

Commissioner responsible for Taxation and Customs Union, Statistics, Audit and Anti-fraud

STRENGTHENING TOOLS FOR DECISION MAKING TO SUPPORT RECOVERY

Greek Parliament / Athens, 4 June 2013

Ladies and Gentlemen,

I am delighted to be in Athens and honoured to have the opportunity to address you today.

Although the economic and social situation remains very difficult, there are obvious signs of improving confidence in the medium term recovery process for Greece. Investment and exports are indicators pleading for a projected return to growth in 2014. This is testimony to the hard work of the Greek authorities, and to the determination and resilience of the Greek people as a whole.

The international institutions have been with you, every step of way, in the recovery process so far. And they will continue to be there, with the same commitment and support, for as long as is needed to return Greece to economic stability.

As you know, my portfolio in the European Commission is a broad one, covering taxation, customs, statistics, audit and anti-fraud.

Each of these policy areas is of high relevance to Greece in the reforms it is undergoing, and of critical importance for long-term sustainable growth.

Unfortunately, time prevents me from addressing them all in detail today. So I will focus on taxation and statistics, as these tend to fall in the spotlight more frequently.

This is not to say, however, that customs reforms, or efforts on anti-fraud, are of any less importance and I would urge you to pursue further improvements in both areas with full vigour.

Taxation

Now let me turn first to Taxation.

As you know, tax reforms and the improvement of tax collection and recovery are two essential elements of the Greek adjustments programmes. In this context, notably through the work of the Task Force, the European Commission is committed to help Greece to redesign its tax systems and improve tax compliance.

This is an opportunity for me to underline, once again, how essential fair and efficient tax systems are for competitiveness and growth, and for social cohesion overall.

What does this mean in practice?

It means that rules must be simple and consistent, easy to comply with and easy to enforce.

It means that mechanisms must be there to deter, detect and punish tax evaders, so that everyone pays what they owe.

And it means that, while revenue collection must be the primary goal of taxation, the burden must be fairly shared and it must support wider social objectives.

These are the road-signs that Greece, like every other Member State, should follow in implementing its tax reforms.

We can already see movement in the right direction.

For example, the newly created post of Secretary General for Public Revenue is a good initiative. This offers focussed leadership to drive forward essential changes and to steer a more effective the tax administration with the necessary level of autonomy.

Likewise, positive steps have been taken to simplify and modernise tax legislation. The new Tax Codes, for example, will put in place more modern procedures, in line with international standards.

The impact these can have in facilitating businesses in paying their taxes, and the administration in collecting them, is enormous.

However, there is a long road still to be travelled before Greece has a tax system that can be considered fully fit for purpose.

One priority must be to cement the new organisational structure of the tax administration, and ensure that it is adequately staffed with professional, well-trained and reliable personnel.

Another priority must be to improve the actual collection of taxes.

On one hand, simplified structures and rules, and improved administration, will facilitate compliance. But Greece must take a tougher stance against those who seek to escape paying what they owe.

Better debt collection and better auditing of wealthy tax payers have been two areas of primary focus in our technical assistance to Greece.

But I fear that progress is still too slow.

I know that legislation has been developed and new "mass recovery tools" have been designed to address these issues.

But these need to be accompanied by strong political will to implement all necessary measures and to collect what the public purse is legitimately due.

That is the only way that Greece can move away from a system where the tax burden falls disproportionately on wage earners and pensioners, and is too lenient on the rich and self-employed. It goes back to the issue of fair taxation.

Tied to this, Greece also needs a zero-tolerance policy against tax fraud and evasion.

You will have seen the clear call from EU leaders two weeks ago for real and concrete progress to be made – and made quickly –to tackle these pervasive problems as a Union.

Certainly, Greece can both contribute to, and benefit from, stronger measures against evasion and avoidance at EU level.

As an illustrative example, I would just mention that the revised EU Savings Directive and a stronger EU-Swiss savings agreement alone could return billions of euros to national treasuries.

Here, there is an opportunity for Greece to reinforce its fight against tax evasion at home – which does need reinforcing – by marrying it to actions being taken at EU and global level.

For example, I welcome your intention to strengthen Anti-Abuse Rules to avoid profit shifting, and would urge you to do so in line with the one we have proposed in the Recommendation on Aggressive Tax Planning.

I would also encourage you to rapidly implement the other measures in this Recommendation, as well as the actions we have proposed against tax havens.

Further strengthening existing anti-money laundering tools would also greatly assist in identifying tax evaders and freezing their assets. The Commission has contributed greatly to the technical assistance to Greece in fighting corruption, and will continue to do so.

To conclude on taxation, the Commission recognises the ambitious change agenda that is being pursued in Greece. For my part, I will do everything at hand to support the further essential actions that need to be taken.

Statistics

I will now move on to another area in my portfolio which is of particular importance to Greece: Statistics.

I am sure you are all too aware of the importance of credible statistics for trust in decisions taken at national and EU level.

Moreover, high quality statistics are crucial for public support for these decisions, for Member States’ confidence in each other, and for ensuring measured market reactions.

With this in mind, I can only applaud Greece for the progress it has made in this field.

Impressive reforms have been implemented, in line with the Joint Overall Statistical Greek Action Plan, and through close cooperation between Eurostat and Elstat.

As a result, Eurostat has been able to publish Greek EDP data without reservation for the past 6 consecutive notifications.

This is an unequivocal indication that the quality and reliability of Greek government statistics are no longer disputed.

Confidence in the production of trustworthy national finance statistics has gradually been restored.

And Greece has even been a pioneer amongst the Member States in signing the Commitment on Confidence in Statistics last year.

I have already seen improvements in Elstat’s situation as a result, in particular as far as its governance and professional independence are concerned.

On this note, I must urge you to put the protection of Elstat and its staff right at the heart of your priorities.

Only a strong and autonomous statistical office can ensure the transparency and credibility of statistical information that is needed, in line with EU standards.

In terms of the way ahead, I would say keep up the good work – and go further. There are more reforms required to sustain the present quality of Greek statistics.

Eurostat will continue providing technical assistance and advice on EDP issues in close cooperation with all institutions involved, while respecting their competences.

And the Commission stands ready to support Greece on maintaining high quality, reliable statistics whenever and however it can.

Ladies and Gentlemen,

Recovery from economic and financial crisis remains a challenging task for Europe as a whole. And all the more so for Greece.

Recent developments in Greece show that the reforms launched in a number of domains are the right way forward.

2013 is an important year. After six consecutive years of recession, Greece is expected to return to growth.

I am encouraged by the discussions I have had with my interlocutors on this trip. There seems to be a commitment to lead this process towards transparency, efficiency and above all, fairness.

I am sure that this commitment is shared by the representatives of this Parliament. And you have a very important role in rallying the support of all participating parties of the country.

I do appreciate that what you face are not easy battles, and often require a fundamental shift in culture.

But the determination of this Parliament and the Greek government, the courage of the Greek people and the support of your European Partners, are key elements for success.


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