Effective immediately: Greek taxman to snoop in bank accounts and seize funds at the touch of a button

Come December 12th, ‘Big Brother’ will be able to directly scrutinize the loans and bank accounts of Greek taxpayers within 24 hours of a request being submitted, and without judicial oversight,  following a decision by the Ministry of Finance.

Specifically, investigators of the General Secretariat of Public Revenue, the Economic and Financial Crime Unit (SDOE), the Financial Police, the Prosecutor for Financial Crimes, the Prosecutor  for Crimes of Corruption as well as the Agency combating the movement of ‘black money,’ will be given access to detailed confidential banking information of taxpayers and businesses being audited through a new electronic system linking tax inspectors to banks.

Furthermore, the process for tax officials to seize funds directly from the accounts of citizens and businesses with outstanding debts to the state will be streamlined greatly, occurring ‘at the push of a button’ through electronic seizure orders and without debtor notification once the deadline for payment has passed.

What information will the auditors have access to?
As reported by the newspaper ‘Ta Nea’ (link in Greek) the auditors will not have direct online access to taxpayer’s bank accounts. They will however be provided electronically with detailed bank account information within 24 hours of submitting a request to the bank.

Investigators will request information through the encrypted system from banks on individuals and businesses being audited. Any banks who have those businesses or customers as clients will be obliged to provide detailed information on any and all accounts they have with the bank including all transactions, loans, money transfers etc going back decades.

Who will have access to the information?
Aside from the auditor, his or her supervisor will also have access to citizens’ confidential banking information. The deadline for a bank to comply with an auditor’s request for information is noon of the following working day. Once the electronic system is launched on the 12th of December all information requests by the relevant financial investigators will be submitted through the system.

Bank account seizures at the push of a button
Taxpayers and business with outstanding debts to tax and customs offices also face having the amounts owed taken directly from their bank accounts under new, greatly simplified procedures.

The process is known as an “automated bank account seizure” will occur without prior notification of the debtor once the deadline for payment has passed and without the need for independent judicial authorization. This means that seizures of funds will occur on much shorter timeframes than in the past.

The goal of the system is to reduce the room for maneuver of taxpayers with outstanding debts to the state and groundwork for its implementation is already being laid with special training seminars for staff taking place in the Finance Ministry’s General Secretariat of Information Technologies.

According to reports (link in Greek) immediately on receiving an electronic seizure order from a tax office, banks will be obliged to transfer the sum in question to the Finance Ministry’s account, with all of the associated paperwork being completed within 10 days. Any transaction coming after the time and date of the bank’s seizure order (as established by its electronic signature) and conflicting with it will be prohibited.

In other words in the eyes of the tax office from the point that it has issued a seizure order for funds in a tax payer’s account it is considered that those funds belong to the Finance Ministry which then has the right to withdraw them without the authorization, or even notification, of the taxpayer in question. If the funds in an account are not enough to cover the amount owed then the account will simply be emptied.

The relevant law authorizing the new electronic ‘search and seizure’ system is law 4170 which was passed in June. According to this some funds will be exempt from seizure by tax authorities including unemployment benefits and salaries, pensions and benefit payments up to 1,000 euros. However it has been reported that these restrictions only apply on the day these funds are deposited and that, the next business day, i.e. once they have been added to the total account balance they will be fair game.

Many however fear that the new powers granted to the tax authorities will lead many Greeks – particularly the wealthy tax evaders the Finance Ministry is seeking to target – to move their money out of Greek banks and out of the reach of the Greek state.