As with any type of re-engineering, when endeavoring to reshape the economy, we must first determine its current status and specific circumstances before we can attempt to find solutions.
For years now, Greece has suffered mainly from the following (in no particular order of importance):
- Heavy debt burden
- Rampant tax evasion
- Uncertain investment environment
- High taxation rates
- Economy in a state of flux
- Bureaucracy
- Brain drain
- Overlapping and conflicting legislation
- Very slow judicial system
- Slow moving banking system
In lieu of proposing solutions, I will provide a methodology for resolving some of our problems and putting Greece on a path of increased growth.
First, we must determine our strategic plan—where we want Greece to stand within the Balkans, Europe, and the world—and from there we can develop our to-do list, which will help us formulate our actions and solutions.
In formulating solutions, we do not need to reinvent the wheel. We must research and assess what other countries have done to attract investment and improve their economies, and we should then choose those policies that are best suited to our situation.
In doing this, there are some basic facts that we need to acknowledge and be aware of. These are:
- Growth arises from investments, be they public or private.
- Given the current economic state of Greece, public investments are difficult due to the lack of funds. We must therefore focus on attracting private investment, both domestic and foreign.
- In attracting private investment, we have to compete with many other countries.
- Implementation of investments must be timely. It is not acceptable to allow years to lapse between submission of a business plan and its full implementation.
- While the above obviously involve long term planning, there are some things that we can do in the short term too; these are:
- Set up a committee to streamline the approval of investments, making decisions based on business plans and reports by independent professional advisors.
- Cut bureaucracy. For example, allow the formation of shelf companies, allow registration with tax authorities by mail, limit documentation to be filed with tax authorities to the absolute minimum, etc.
- Limit the number of permits required in order to commence operations.
- Reduce tax rates to make them competitive.
- Introduce measures to ensure fair tax treatment of investors and to provide quick, fair, and effective independent mediation for the resolution of disputed tax authority decisions.
- Devise a system of effectively combating tax evasion so as to compensate, to some extent, tax rate reductions. Implement solutions that address tax evasion long-term, introducing long-lasting penalties, audits, and thorough origin of wealth checks for tax evaders instead of focusing on isolated enforcement.
- Use digital technology as much as possible for simple services and for the submission of documents.
Finally, we must depart from the notion that everyone is a crook and that we must hence design elaborate bureaucratic systems to catch them (systems that have proven inadequate for that purpose anyway), and we must instead move to simpler systems that will be designed with a focus on honest people, enabling them to conduct their business easily and efficiently.
Source: bponline.amcham.gr
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