According to a report by the Hellenic Foundation for European & Foreign Policy (ELIAMEP), the Greek state is losing 13 billion euros annually in tax evasion and corruption. In spite of increased taxes that have been imposed through Value Added Tax, property tax, taxes on petrol and central heating oil, and other taxes which are collected directly through spending, tax evasion through business remains rife.
The situation is exacerbated by corrupt tax officials who embezzle a percentage of fines imposed on those who fail to pay their taxes. Nikos Lekkas, head of investigations at Greece's anti-fraud squad, claims only 20 percent of fines are collected, 40 percent written off, and 40 percent embezzled by tax officials. (Naharnet
) Considering the amount of time the tax office spends on strike, rather than on tax collection, it is not surprising that tax evasion is rampant.
Deputy Defense Minister Yiannis Ragousis was critical of the former head of information at the Ministry of Finance, Diomidis Spinellis, saying government ministers had been misled by the size of the problem. Ragousis said at a meeting of ELIAMEP “At cabinet meetings we were told categorically that everything was being done to fight tax evasion.” (Ekathimerini
drew attention to one quarter of Greece's GDP being untaxed, highlighting again the vast number of undeclared swimming pools in a rich Athens suburb that were discovered using Google Maps. Of an uncovered 17,000 pools, only 324 had been declared on tax returns. Doctors are far less likely to expect a brown envelope stuffed with cash these days, knowing that patients can't afford to fill them. Greeks themselves are far less tolerant of corruption
than they once were, with a survey in March showing 83 percent now find it unacceptable to pay a bribe.
In general areas of life though ordinary Greeks are paying taxes in a way that was unheard of several years ago. Receipts are issued in tavernas and coffee shops as normal practice these days, instead of the old way of only being produced if the tax man was heard to be in the vicinity. The problem of black economy wages persists in some areas, as those who employ casual labour often persist in paying cash-in-hand in order to reduce the costs of paying national insurance (IKA) for their employees.
Employees would often rather pay the IKA to ensure they have the benefits. There is also the issue of many illegal immigrants seeking casual employment, an issue which until the last few years was primarily an Albanian one. Now there are an estimated 2 million illegal immigrants in Greece.
Greek Finance Minister Evangelos Venizelos chaired a meeting on Wednesday to target new measures to combat evasion.