Filenews 7 October 2021 - by Eleftheria Paizanos
The new Tax For All computer system that the Tax Department has begun to implement is expected to make the lives of taxpayers even easier. The new electronic system is expected to be installed by the end of 2023 and will reportedly contribute to an increase in state revenues.
Also, the new system is expected to put on a new basis the operation and performance of the competent Department of Taxation. At the same time, it will replace all the existing systems and electronic applications that the Department currently has. In addition, the new tax for all computer system aims to provide immediate and easy information and communication with taxpayers on tax debts and to find the best and fastest compliance methods.
The new mechanical system Tax For All, follows the operation of the Tax Portal in mid-2020 and the addition of new electronic services to the platform. These actions are aimed at the beginning of electronic service to taxpayers for tax collection. According to the Strategic Plan of the Department of Taxation 2022-2024, the monitoring and enforcement of tax compliance must be carried out in a uniform manner through modern technology that allows both the improvement of taxpayers' voluntary compliance procedures and the actions to ensure the fulfilment of tax obligations by taxpayers.
At the same time, through the functions of the new computer system, it is expected to improve the reaction time to latent tax behaviour through an automated system of information to taxpayers and the Department. In addition, the new electronic system will help serve taxpayers to comply with their tax obligations. According to the Plan, "the continuous support of taxpayers through the issuance of information material, instructions and announcements, as well as full and detailed guidance either through links or through automatically displayed messages when using the available electronic tools is the key to the immediate service of the taxed persons".
Increased revenue
However, pending the completion of the new tax for all computer system, it is estimated that 2022 revenues will return to 2019 levels of €4.56 billion. At the same time, there are estimates that in 2024 revenues will show an increase of 10% compared to 2022, given that there are no unforeseen circumstances. The increase is estimated at around €400 million. However, the upward trend of tax revenues between 2017-2019 (which in the three-year period was €12.68 billion) was stopped by the coronavirus pandemic, resulting in a decrease in last year's receipts by 5.20% i.e. €235 million.
Moreover, this year in the first half of 2021, tax revenues recorded an increase of 0.9% corresponding to €17.5 million. compared to the previous year, which reached €1.86 billion. According to the Strategic Plan, the revenue change for the three-year period 2021/2019 was estimated at 12% based on the 2017/2015 growth rate which was 10.3%. The latest estimate of the revenue growth rate for the three-year period 2019-2021 is estimated at – 4%.
5% increase in additional tax by 2024
An increase in the additional income tax imposed on taxpayers (natural and legal persons) from the conduct of thorough audits is expected by the Department of Taxation. The additional income tax is the percentage of the additional tax from tax audits as a percentage of the total income tax imposed by the Department. As stated in the Strategic Plan of the Department of Taxation, pending the completion of the new tax for all computer system and the more targeted selection of cases and areas (in terms of type and point of tax) control, and taking into account that the corresponding return in 2019 was 2.6% and in 2020 it was 1.1% due to the particular circumstances of the Covid-19 pandemic, in 2024 it is estimated that the rate of additional tax in terms of total taxation will reach at least 5%.
The age of the debts will be reduced to four years of age
Moreover, the Tax Department aims to clear the inaccessible debt by 2024. According to data based on the debt analysis as at 31 December 2020, the average age of the debt immediately due is 70 months corresponding to 6 years. In fact, the average is increased by one year compared to 2017. By 2024, the Department aims to liquidate the non-recoverable debt and intensify the recovery measures and for this reason it is estimated that the age of the immediately due debt will be reduced to 50 months, which corresponds to four years. It is worth noting that the age of the debt is one of the possible indicators of measuring the effectiveness of tax collection. The age of the tax debts immediately due is calculated as the average time that the tax debt, direct and indirect taxation, remains pending.
