Lenders Voice Concerns About Greek Tax Crisis

Greece’s 240-billion-euro ($317.2 billion) international bailout package came with a number of strings attached. In order to receive the funding necessary to keep its economy afloat, the International Monetary Fund and European Union finance ministers developed a long list of austerity measures and financial reform that the Greek government has been obligated to implement.

High on the list is tax reform. The Wall Street Journal reports that tax dodging accounts for an estimated loss of 28 billion euros ($36.93 billion) per year, or about 15 percent of Greece’s economic output, a problem that is well understood by the country’s international lenders. In order to receive bailout funding, the IMF asked Greece to audit 1,300 suspected wealthy tax evaders by the end of 2012, with a target of collecting 2 billion euros ($2.64 billion) in unpaid taxes.

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But a recent report compiled by the IMF and EU finance ministers shows that by the end of September, Greek authorities had only conducted checks on 440 suspected wealthy tax evaders, pulling in about 1.1 billion euros ($1.45 billion) in overdue taxes, a far cry from the target level.

The report issued by the IMF and EU suggest that between 15 and 20 percent of some 52 billion euros ($70.05), or between $10.5 and $14 billion, in overdue taxes can be reasonably claimed by the Greek government…