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Today’s Top Headlines

Tax Evasion In Greece Remains High

by Lorys Charlambous,, Cyprus

17 November 2016

The amount of tax evaded annually in Greece is the equivalent of up to nine percent of the country's gross domestic product (GDP), according to a new analysis by EY.

The study, undertaken on behalf of the think tank DiaNEOsis, concluded that the amount of tax evaded by individuals ranges from 1.9 percent to 4.7 percent of GDP per year. The equivalent of 3.5 percent of GDP is lost through value-added tax evasion.

The amount of tax lost because of evasion by businesses is thought to be smaller, at 0.06 percent to 0.15 percent per year. Tax evasion through the smuggling of goods such as alcohol and tobacco adds is running at 0.45 percent of GDP annual, the report said.

The total amount of tax evaded is therefore put at six percent to nine percent of GDP each year.

The figures were presented by Stefanos Mitsios, Head of Tax at EY in Greece, during the 8th Tax Forum organized by the Hellenic-American Chamber of Commerce in Thessaloniki.

According to Mitsios, the persistently high levels of tax evasion in Greece can be attributed to a number of factors, including high and rising rates of tax, and the complexity and uncertainty of the tax regime generally. Successive governments have also failed to get to grips with the problem throughout the debt crisis, he added.

Mitsios called on the Government to address the problem by reducing bureaucracy within the tax administration, and introducing more automated processes.

Encouraging wider use of electronic transactions through debit and credit cards and discouraging the use of cash would also help to cut tax evasion, he said. At present, debit and credit cards account for just six percent of total transactions in Greece, the second-lowest level in the European Union, the study found.

TAGS: individuals | tax | business | value added tax (VAT) | Greece | Europe | Tax | Tax Evasion

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