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Greece toughens sanctions for corrupt tax officials

by Ingrid Melander | Thomson Reuters Foundation
Friday, 11 March 2011 17:54 GMT

ATHENS, March 11 (Reuters) - Greece on Friday toughened laws punishing corrupt tax officials in an effort to fight rampant tax evasion ahead of a euro zone summit expected to press Athens to step up reforms.

   Shortfalls in tax collection are a key weakness for Greece as it battles to shore up its finances under the terms of an EU/IMF bailout, while the lack of sanctions for corruption makes it hard for many ordinary Greeks to accept austerity measures.

   "Any tax offical who gets bribed will face felony charges from 1 euro, instead of the current 73,000 euro threshhold," the finance ministry said in a statement, meaning corrupt officials face jail terms not just fines for even small bribes.

   Euro zone leaders meeting in Brussels on Friday may call on Greece to work harder to implement its EU/IMF reform programme, amid signs it is not going to meet its targets, a senior EU source said.

   Greece met cash deficit targets last year thanks to sharp cuts in public spending but struggled to increase revenues and fight tax evasion.

   It missed indicative cash targets in the first two months of the year in the wake of weaker budget revenues and a rise in spending.  

   The finance ministry also announced tougher sanctions for smuggling goods on Friday.

   Greece's top tax official resigned on Wednesday two days after Moody's slashed the country's credit rating by three notches, citing continued flaws in its tax collection mechanisms, among other reasons.

 (Reporting by Ingrid Melander; Editing by Catherine Evans)

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