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Greece needs to overhaul its tax system as part of the solution to the country's economic woes, the International Monetary Fund said in its annual Article IV report for the country.
In a report that echoed previous years' recommendations, the Fund said that Greece must broaden its income tax base, tackle evasion, improve its tax administration, and chase tax debtors.
It said that the fiscal system is inefficient and unfair in providing an inadequately low tax burden for middle-income earners and levying significant tax on lower-paid taxpayers.
The report said that Greece's inefficient tax system has resulted in tax revenue collections that, compared with the size of the economy, are among the lowest in Europe, while tax rates are high.
It added that the country's tax reform policies, which focus on successive tax hikes, are "not growth-friendly" and could be "difficult to sustain."
The IMF instead recommended a cut in tax rates along with a one percent increase in the headline rate of VAT.
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