Katerina Savvaidou, a taxwoman with a bad sense of public interest

"Κaterina Savvaidou". Sketch by Rania Papadopoulou (source: The Press Project) "Κaterina Savvaidou". Sketch by Rania Papadopoulou (source: The Press Project)
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Dimosthenis Papadatos-Anagnostopoulos

 
One of the main declarations of the current government, already from its previous run, was that it would put an end to the tax immunity traditionally awarded by Greek governments to parts of the business world, and that it would also confront the widespread tax evasion endemic among middle and upper tiers of the income pyramid. Up to now, results have been meager. However, in theory, this was a common goal of both Syriza and the troika: from January 2015 already, current government officials were claiming that the troika had withdrawn its support from the ND/Pasok government, precisely because they would no longer trust its intentions and abilities regarding revenue collection.
 
The severity of the problem becomes strikingly evident in data the European Commission issued in September: in the period 2009-2013 alone, the Greek state lost about 37 billion euro to tax evasion. Considering the fact that, prior to 2009, the taxpaying capacity of persons and businesses was much bigger, and that the tax-collection mechanisms were not as understaffed as they are after six years of “adjustment”, one gets an even better picture. What's more, if one compares the missing 37 billion with the antisocial measures comprising the third memorandum that was recently voted for by the Greek Parliament in order to disburse a tranche of 2 billion euro in bailout funds, then the importance of the Secretariat General of Public Revenue becomes even more apparent. Katerina Savvaidou, its head until very recently, however, saw things somewhat differently.
 
In theory, Secretaries General of Public Revenue serve five-year terms, so that their work is not influenced by changes in government. However, the provision did not apply in the case of the previous Secretary, Charis Theocharis, who was dismissed by then Prime Minister Samaras and is now an MP with “Potami”. After the Cabinet's decision on Thursday to remove Ms. Savvaidou from office, it seems that the provision will not apply now either. Soon after Theocharis' removal, conservative daily “Kathimerini” noted that “never before have the 18 Finance Ministers of the Eurozone spent so much time on the dismissal of a member-state's official”, pointing out that, for the troika, removing the Secretary General of Public Revenue from office meant undermining the position's independence from the government, and therefore going back to practices of political intervention that paralysed the tax control mechanisms of the state for decades. The case of Savvaidou will probably raise similar objections, based on the argument of the General Secretariat's independence with which the Greek government is obliged to comply according to the third memorandum. But what are the limits of this independence, and what is its content?
 
Last week, the Public Prosecutor Office of Athens indicted Katerina Savvaidou on the charge of breach of duty. The reason was that, on 12 January 2015, in the middle of a pre-election period, the Secretary General decided to grant one year, instead of one month as the law dictates, to the private television channels before they had to pay a 20% tax on advertising they had already collected. Soon after the indictment, Prime Minister Tsipras himself asked for her resignation. She however refused, claiming she was innocent and that her practice was what the government is doing today by postponing the rise of VAT for the private education. As if this wasn't enough, it was revealed by the press that, just a few days before the Parliament voted for the prerequisites of the third memorandum, the Secretariat General of Public Revenue had proposed an amendment that would ensure immunity for its head.
 
After all these developments, the only support Ms. Savvaidou has at home comes from New Democracy and Potami. It was under the Samaras government that Savvaidou got the job, chosen among 75 candidates following the suggestion of then Finance Minister, Gikas Hardouvelis. The argument with which ND stands behind Savvaidou is that the government undermines the independence of institutions...
 
Accredited lawyer to the Supreme Court, lecturer at the Aristotle University of Thessaloniki and top executive of PwC-Greece, Savvaidou has always had a very peculiar sense of public interest and the priorities of tax policy. According to various sources referring to the LuxLeaks scandal, PwC set up legal tax avoidance schemes on behalf of the Greek branches of big multinationals. As explained by the independent news site The Press Project,[1] this activity was highly unlikely to have gone unnoticed by PwC-Greece, since “the majority of tax rulings was about efforts made by companies to avoid paying taxes in Greece for profits made in Greece”. On the other hand, this activity did not stop the ND/Pasok government from appointing Savvaidou to a committee of the Ministry of Finance already in July 2013. Nobody thought that there actually might be a conflict between taking up the role of government advisor, as she introduced herself at the time, and being a high-ranking executive at a company that specialises in tax ruling...

NOTES
[1] Nicolas Leontopoulos, “Katerina Savvaidou: A wolf guarding wolves” (in Greek)

Translated by Dimitris Ioannou