Enhanced Tax Collection Efforts Yield Positive Results
The Tax Department has reported a significant increase in tax revenue for the year 2023, with a total of €6.7 billion collected, marking a €700 million rise from the previous year’s €6 billion. Tax Commissioner Sotiris Markidis attributed this uptick not only to an improved economy and inflation but also to the department’s efforts and the implementation of a new mechanism designed to enhance efficiency in tax collection.
Markidis highlighted the role of a forthcoming software system, which is anticipated to be fully operational by 2025, in further improving the tax collection process. This advanced system is expected to address the current challenges faced by the department in managing the taxes of approximately 400,000 entities, including individuals and companies.
The parliamentary discussion followed the auditor-general’s report, which revealed that the state is owed €2.5 billion in taxes, with concerns over the collectability of €1.1 billion of that amount. Auditor-General Odysseas Michaelides expressed skepticism over the Tax Department’s methods, suggesting that tax returns are being cleared without adequate checks and relying solely on taxpayer declarations.
Markidis responded to these criticisms by describing them as an oversimplification and defended the department’s procedures. He also pointed out the department’s success in imposing an additional €500 million in taxes and issuing €150 million in tax rebates. The Tax Commissioner emphasized the need for stronger penalties to deter late filings, proposing an automatic €100 fine for companies that miss deadlines.
The conversation also touched on the importance of modernization within state departments. Akel MP Irini Charalambidou advocated for comprehensive computerization as a crucial step towards a more efficient state apparatus, where accessing necessary information could be as simple as entering an identity card number.
As the Tax Department looks forward to the full deployment of their new computer system, Markidis remains hopeful that these technological advancements, along with proposed policy changes, will lead to even more effective tax collection strategies in the future.
