Monday, November 09, 2015

Greece Fails To Impress Quadriga

Unsurprisingly the wheels are falling off the Greek bailout again, as Greece battles to secure the release of €2bn in bail-out cash.

Despite assurances over the weekend, based on hope rather than reality, by Greece that the tranche of money would be released, it hasn't.

It seems that Greek finance ministry officials have failed to convince Greece's creditors that their plans added up, delaying disbursement for at least another week.

One of the main sticking points centre around laws to ease the process of home repossessions for indebted Greeks. The Quadriga are demanding that Greek residences valued above €120,000 be subject to the country's foreclosure laws, from the current level of €200,000.

However, Syriza has resisted the demand for fear of exposing thousands more people to the threat of losing their property.

Additionally, Greece does not want to impose a 23% tax on private schools and other issues surrounding VAT.

As Pascal Saint-Amans, director of tax policy at the Organisation for Economic Development (OECD), warned there are no “quick fixes” for Greece's endemic tax avoidance problems. He is also very sceptical about Greece's ability to reform its third world tax system.

He is quoted by the Telegraph:

"The challenges in Greece are so big.

It's about the complete lack of compliance, it's about a very weak tax administration, it's about the fact that paying taxes remains something that people don't want to do because they don't see how the money is spent.

Very often as tax people we lose sight of the fact that tax is just a means to fund a society. The reforms must take both into account”
Thus until Greece fundamentally reforms its tax collection system, it hasn't got a hope in hell's chance of moving forward. That will require a radical change of mindset by the Greek people, something they are probably not prepared to do.

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