Dear President of the Eurogroup,
In the Eurogroup of 20 February 2015 the Greek government was invited to present to the institutions, by Monday 23rd February 2015, a first comprehensive list of reform measures it is envisaging, to be further specified and agreed by the end of April 2015. In addition to codifying its reform agenda, in accordance with PM Tsipras’ programmatic statement to Greece’s Parliament, the Greek government also committed to working in close agreement with European partners and institutions, as well as with the International Monetary Fund, and take actions that strengthen fiscal sustainability, guarantee financial stability and promote economic recovery. The first comprehensive list of reform measures follows below, as envisaged by the Greek government. It is our intention to implement them while drawing upon available technical assistance and financing from the European Structural and Investment Funds.
Minister of Finance
I. Fiscal structural policies
Tax policies – Greece commits to:
- Reform VAT policy, administration and enforcement. Robust efforts will be made to improve collection and fight evasion making full use of electronic means and other technological innovations. VAT policy will be rationalised in relation to rates that will be streamlined in a manner that maximises actual revenues without a negative impact on social justice, and with a view to limiting exemptions while eliminating unreasonable discounts.
- Modify the taxation of collective investment and income tax expenditures which will be integrated in the income tax code.
- Broaden definition of tax fraud and evasion while disbanding tax immunity.
- Modernising the income tax code and eliminating from it tax code exemptions and replacing them, when necessary, with social justice enhancing measures.
- Resolutely enforce and improve legislation on transfer pricing.
- Work toward creating a new culture of tax compliance to ensure that all sections of society, and especially the well-off, contribute fairly to the financing of public policies. In this context, establish with the assistance of European and international partners, a wealth database that assists the tax authorities in gauging the veracity of previous income tax returns.
Public Finance Management – Greece will:
- Adopt amendments to the Organic Budget Law and take steps to improve public finance management. Budget implementation will be improved and clarified as will control and reporting responsibilities. Payment procedures will be modernised and accelerated while providing a higher degree of financial and budgetary flexibility and accountability for independent and/or regulatory entities.
- Devise and implement a strategy on the clearance of arrears, tax refunds and pension claims.
- Turn the already established (though hitherto dormant) Fiscal Council into a fully operational entity.
Revenue administration – Greece will modernise the tax and custom administrations benefiting from available technical assistance. To this end Greece will: