IMF: If Greece collects more tax, austerity eases

Greece could avoid slashing wages and pensions more to reduce its deficit if it steps up tax collection, the International Monetary Fund said Thursday. "If Greece can do a better job of collecting taxes, then the government should be able to avoid further wage and pension cuts," IMF spokesman Bill Murray said at a news conference. Murray was speaking as auditors representing Greece's IMF, EU and European Central Bank creditors were in Athens this week to assess the progress of its program bailout program. The IMF experts were expected to end the mission in mid-March, he said. The report of the so-called "troika" of international creditors will determine whether Athens will receive a scheduled loan installment of 2.8 billion euros ($3.7 billion). In March 2012, Greece obtained a massive bailout but successive installments were suspended for months due to delays in implementing reforms and austerity measures mandated by the aid program to narrow its fiscal deficit. In a draft report released Thursday by an association of Greek tax collectors, EU and IMF auditors criticized Greece for failing to address its poor tax collection, a key requirement for the reeling country to get back on its feet. The draft report said reforms in tax management were "fragmented" and "muddled" and the country collected 1.0 billion euros, only half of the budget target. The state is still owed 55 billion euros, a sum it has little hope of collecting because many debtor companies are bankrupt. "A visible risk is that tax administration will continue to follow a course of slow reform without eliminating political tampering or corruption," the report said. "It is rather unlikely that 2013 revenue targets will be met without immediate changes," it said. Murray declined to comment on the report, saying he had not read it, but added: "Improving tax collection will feed into the staffing levels." Among its obligations to its creditors, Greece must eliminate 25,000 civil service jobs this year.