Greece proposes undercover tax inspectors; US jobs report beats …
Given the scale of tax evasion worldwide, it feels wrong to knock the Greek finance ministry for proposing a clampdown.
So, if wiring up concerned members of the public and tourists is questionable, is there a better way?
Well, Greece could learn from Slovakia’s example. It roped in its civilians to help, by collecting all their sales receipts for anything over one euro, whether at a store or a restaurant.
As my colleague Jana Kasperkevic explains:
Each receipt is printed with the business’s company tax ID. Slovakian authorities want citizens to go home, look up the receipt with the tax ID, and enter it into a national database. The Slovakian finance ministry will look through the database to double-check that the businesses are correctly reporting their income – or so they say.
And citizens were offered the carrot of a free prize draw for taking part.
Can the IRS tap citizen power to police tax-evading corporations?
Or Athens could look to Israel.
According to Bloomberg’s Stephen Mihm, the Israeli authorities tackled a deep-seated aversion to tax payments in the 1970s by imposing tougher penalties, simplifying the system, and making tax offices less confrontional and more friendly.
Mihm says:
Such subtle interventions were bolstered by a huge public-relations campaign to change the attitude toward taxes. The government introduced lessons about taxation into the secondary school system, the armed forces and other institutions; it also flooded the country with pamphlets and advertising, and offered tours of tax offices.
The government sought to convey the sense that taxation wasn’t an evil to be avoided, but the price of citizenship. It even built a museum of taxation (it so impressed U.S. officials that the Internal Revenue Service built one, too). The government commissioned a short propaganda film (“The Tsippori Affair”), which followed the travails of a man who discovers that government ceases to function when he evades taxes.
By avoiding single-minded, heavy-handed interventions (as countries such as Argentina did, unsuccessfully) Israel fixed its problem. By the 1970s, tax evasion had largely disappeared, and Israel became an adviser to other countries struggling to collect taxes from their recalcitrant citizenry.
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Greece proposes undercover tax inspectors; US jobs report beats …
