The International Monetary Fund extensively highlights the impressive results of the Greek economy in its latest report titled “How tax administration supported Greece’s economic recovery.” The IMF emphasizes how remarkable the transformation is for a country that was once an example to avoid, while today it serves as a model for other nations to follow.
Read: IMF: Greek tax authority a model of modernization and digital transformation
IMF for Greece: Tax administration reform serves as example for other countries
The latest report by the International Monetary Fund titled “How tax administration supported Greece’s economic recovery” is particularly commendatory for Greece and its economic progress in recent years, emphasizing that it serves as an example for other countries.
While some aspects of Greece’s tax administration reform are unique, its experience offers particularly valuable lessons that can be applied more broadly, the IMF report notes characteristically. “Sustained effort – based on good governance, careful sequencing, and investment in people – can transform crisis response into lasting institutional strength,” it emphasizes.
Greece, as the IMF notes, was once Europe’s cautionary tale, shut out of markets, dependent on external financial assistance and collecting very low tax revenues to finance public services and support economic development, while today it is one of only five European Union countries with a primary budget surplus.
“This development,” as it underscores, “represents a remarkable turnaround that highlights how much its public finances have improved.” This transformation largely reflects a transformed tax administration that continuously closes compliance gaps and has restored fiscal credibility, one of the quiet engines behind Greece’s broader economic recovery.
IMF: Greece offers valuable lessons for other countries pursuing tax reform
The IMF’s latest annual assessment of the Greek economy’s progress, within the framework of Article IV consultation, found that Greece is well-positioned to handle external shocks, such as those from the Middle East war, reflecting its enhanced fiscal sustainability and financial stability.
It notes that the primary surplus increased to nearly 5% of GDP in the 2024-25 biennium, while the public debt-to-GDP ratio has decreased by approximately 65 percentage points from its 2020 peak. Financing conditions improved alongside the restoration of government bond spreads to levels last seen before the 2008 global financial crisis.
“The reform agenda is not complete. But the scale – and sequence – of Greece’s recovery offers valuable lessons for other countries pursuing tax reform. New IMF work in this area highlights two key findings:
First, governments cannot meet their fiscal reform objectives if taxation is not fair, reliable, and transparent.
Second, developing these capabilities can take time. In Greece, reform evolved through three mutually reinforcing phases: stabilization (2010-12), institution building (2013-17), and digital transformation (2018-25), supported throughout by IMF capacity development,” the Fund notes.
Greece’s digital transformation period 2018-2025
Although digital tools had been introduced earlier, the decisive push came after the firm establishment of institutional foundations, the Fund notes. “At this stage, the tax administration had the governance, skills, and credibility required to establish digitization,” the report notes, adding that after 2020, partly due to the pandemic, Greece implemented a comprehensive suite of digital systems.
“These reforms made compliance easier for taxpayers and provided auditors with more accurate tools to identify risks and target enforcement where it mattered most. The results were clear: VAT compliance improved significantly, with its revenues increasing by 2.4 percentage points of GDP over 15 years – from 7.1% in 2010 to approximately 9.5% in 2025,” as emphasized.
Greece’s virtuous cycle of reforms
Overall, Greece’s reforms created a virtuous cycle as better governance enabled digitization, which in turn improved tax compliance, and higher and more reliable revenues strengthened public trust and fiscal credibility, the IMF finds.
It emphasizes that by 2025, Greece’s tax revenue-to-GDP ratio had reached 28% from 20.5% in 2009. While the revenue increase also reflects broader economic and political changes, improvements in tax administration played a central role, broadening the tax base, strengthening enforcement, and increasing confidence in the system.
In conclusion, the International Monetary Fund emphasizes that “the journey continues. The next challenge is to make recent gains sustainable by embedding new ways of working deep into daily processes. Priorities include more systematic use of analytics and artificial intelligence for compliance risk management, further improving taxpayer services and trust, and ensuring that skills and staff keep pace with rapid technological changes.”
