The man with Greece’s toughest job - the taxman

 

By Colin Freeman, Athens 4:45PM BST 06 Jul 2013

For the millions of Greeks keen to see their country clamber from its financial black hole, Haris Theoharis, the taxman, is there to extend a helping hand.

Thousands of Greeks have protested against the austerity measures placed on them by their government and Europe Photo: Getty Images

His grip, however, is very firm indeed, and has a habit for delving into private places where many would prefer it did not go.

Appointed this year as the country's new "secretary-general for public revenue", Mr Theoharis has the task of filing what is probably the biggest back-tax demand in history – the whopping €40 billion that his fellow citizens have run up in unpaid dues over the decades.

Getting them to cough up is one of the conditions that Greece's international creditors have lain down for continuing Athens' €240 billion bail-out programme. But in a country where tax-dodging has long been likened to a national pastime, that makes Mr Theoharis as much a public enemy number one as a would-be national saviour.

"I get quite a few heckles, with some people saying, 'Soldier on', and others saying, 'No, we've had enough, stop sending us tax bills'," said the quietly spoken 42-year-old, who goes on Greek television talk shows to preach the cause of "compliance".

"Half the perception is that we are going after people who can't afford to pay, and the other half is that we are harassing the rich too much. Mixed messages, though, are probably a sign that we're doing it about right."

Greek tax collectors forced to write off more than two-thirds of unpaid taxes

One broadcaster that he is unlikely to be appearing on for much longer is the state-run ERT, Greece's answer to the BBC, which was abruptly closed down last month as part of government efforts to trim the massive public sector. Following a public outcry and a walkout by a faction in the ruling coalition, it went back on the air again – for now at least.

But it illustrated the problem that Mr Theoharis wants Greeks to face up to: if they wish such services to continue, taxpayers must foot the bill, not foreign creditors.

It was with that message in mind that his post was created last January, partly under pressure from Athens's European Union and IMF bankrollers, who only last week said that Greece was still not doing enough to balance its books. They gave the government until tomorrow to show what extra efforts it is making, on pain of delaying handovers of further bail-out tranches.

On paper, Mr Theoharis's credentials are limited for his powerful new role, having previously worked as a finance ministry IT manager rather than as a tax expert. Then again, "paper" is something that Greece's 19th century-based tax system could do with rather less of. One of Mr Theoharis's main challenges is to create a computer database from its vast archives of dusty files, without which many past tax crimes may never be uncovered.

Indeed, as he freely admits, most never will be. Staggeringly, more than two-thirds of the €40 billion owed has been deemed "uncollectable" – that is, owed by companies or individuals who are defunct, deceased or bankrupt.

"It is just debt on the books, and there is nothing we can do," said Mr Theoharis, a self-confessed "techie" who studied software technology at Imperial College in London. "But the rest we have to tackle. There is no way out of the financial crisis for Greece without the tax administration increasing its efficiency."

To hammer this home, Mr Theoharis also maintains a Twitter account, called IT Monkey, where he does his best to educate a wayward public in the basics of tax law, and congratulates those who occasionally tweet back to say they have completed their returns. Such a high profile is unusual in a profession that is normally a byword for lofty, bureaucratic anonymity. A certain charm offensive is essential to overcome the average Greek's legendary disdain for the taxman.

Tax avoidance first became part of the culture here during Ottoman rule, when it was seen as an act of patriotic resistance. But the practice has persisted thanks to a hugely over-complex system that until recently practically incentivised dishonesty.

Penalties for non-payment were almost non-existent, and courts took up to a decade to bring prosecutions. A rampant bribery culture among inspectors meant that compliance was seen as only for the very poor or the slightly naive.

Tax-dodging also acquired a new-found political legitimacy because of the appalling value for money that taxpayers got from their heavily unionised, massively overmanned public services. Until as recently as two years ago, non-payment and under-declaring cost the Greek government up to a third of tax revenue.

To rectify the idea that only "little people" pay up, this year tax officials have stepped up an aggressive campaign towards big companies and wealthy individuals, including bankers, media moguls and even former ministers.

They are armed with a new law under which anyone suspected of dodging more than €10,000 in taxes can be put in jail pending charges. With this tactic, the glacial speed of the Greek court system is for once an asset: given that a prosecutor can take up to 18 months to decide whether there is a case to answer, many suspects simply prefer to pay up.

Earlier this month, that get-tough campaign claimed an elegantly coiffeured scalp in the form of Lakis Gavalas, a flamboyant fashion-designer famous for extravagant parties at his villa in Mykonos. For 18 months he languished in jail over an unpaid €17 million tax bill, but on Tuesday he finally bought his way out by handing a large amount of his property to the government.

Mr Gavalas, who was taken to jail wearing a €2,500 outfit, and who passed his time inside sifting through the prison's second-hand clothes supply for vintage fashion items, was unavailable for comment. But Giannis Pagoropoulos, his lawyer, told The Sunday Telegraph that he had been made a "scapegoat".

"His lifestyle was a challenge to the current Greek standards of living," he said. "This was public revenge against a man who had everything," Such claims bring a smile from Mr Theoharis, who sees Mr Gavalas not as the Greek fashion world's first political prisoner, rather just a "bit of a whiner".

When it comes to moaning, he also has a fight on his hands with his own staff, a number of whom are likely to lose their jobs as the service is dragged into the 21st century.

A visit by The Sunday Telegraph to a neighbourhood tax payment office in central Athens showed just how antiquated things were. In sweltering heat, hundreds of people lined up to make cash payments for income tax and other levies that in most European countries are now done largely by computer. "I sign about 1,500 papers a day," sighed one sweating official, gesturing to a foot-high pile of printouts. "By the time I go home, my hand hurts."

The more assertive stance on tax collection also puts such offices in the front line of public anger, and there have been incidents of collectors being threatened with guns, butchers' knives and whips.

"One director of an office resigned recently because he was getting five or 10 incidents of trouble every day," said Ioannis Pappas, a tax-collectors' union official.

The following day, the union called a two-day strike over working conditions and proposed office streamlining, meaning even less tax was likely to be collected than usual. While Mr Theoharis says that changes always encounter resistance at first, others say the vested interests in his own ranks are probably his biggest challenge.

"He has great ability, but he needs to get rid of a lot of people, which is very difficult in Greece," said Diomidis Spinellis, from Athens university, who worked with Mr Theoharis at the finance ministry. "I am not sure the government will give him the political support he needs."

Even Mr Pagoropoulos, the lawyer, who has 10 other wealthy clients accused of tax fraud, doubts Mr Theoharis has what it takes. "He is too gentle, and you need a killer for this job, seriously," he said. "Tax-dodging is in the Greek DNA."

For the time being, though, the man from the IT department will continue his reboot of the Greek financial system, trying to put the fear of God – or at least the taxman – into fashion designers, politicians, and ordinary Greeks alike.

If he succeeds, like Mr Gavalas's haute-couture clothes, paying one's taxes may one day become the height of fashion.

The man with Greece’s toughest job - the taxman - Telegraph