By Chrysostomos Tsoufis

At a time when the parties are vying for power with tax reduction at the forefront of their programs, one more, the other less, the Giannis Stournaras intervenes in the public debate by shining a spotlight on the… elephant in the room. Tax evasion.

Greek taxpayers declare a total income of €80 billion, but the declared consumption – because there is also a part that is not declared – reaches €140 billion. One could argue that they are “eating” their deposits, but the data shows that in the period from the end of 2019 to the beginning of 2023, deposits increased by €45.5 billion. The phrase “huge indications of widespread tax evasion” is rather a euphemism.

In Greece today taxes are paid by employees and pensioners, said the central banker.

Indeed, the figures show that employees and pensioners pay 2/3 of the total income tax collected by the state. After all, 73% of freelancers and self-employed people declare an income of up to €10,000 in order to be taxed at the low rate of 9%.

Greece is champion in tax evasion said the central banker.

In fact, the country has the biggest VAT gap after Romania, which is the difference between what it should collect and what it collects. Despite its reduction, it continues to be at the level of €3.2 billion

In its observations on the stability program submitted by the country in May, the Commission observes that the turnover of the self-employed increased rapidly but not the declared incomes and calls for measures to broaden the tax base.

Like the Brusselsas well as Yiannis Stournaras are asking for measures to strengthen electronic transactions and this will be one of the major challenges that the new government will be asked to face in the economic field.

The measure to collect e-receipts from 20 “high-risk” professions that reduce their taxable income by 30% in value has failed miserably. The previous leadership of the finance ministry knows this and is already working on a new motivation system.

However, an important role in reducing tax evasion will also be played by the fact that until the end of October no receipt will be issued in the territory from POS which will not be connected to a cash register that will be “seen” by AADE. At the end of June, the deadline for connecting the cash machines of businesses with a turnover of up to €100,000 expires, and businesses with a turnover of more than €100,000 have until the end of July.

The universalization of electronic books, mandatory electronic invoicing, digital client lists for specific categories of professions are just some of the initiatives being promoted.

Somewhere here, however, the reduction of taxes must enter the discussion. Freelancers e.g. they are not tax-free and are taxed from the 1st euro, even at a rate of 9%, which escalates to 28% for the portion of income over €20,000. And given that the pretense fee lives and reigns, they don’t have much incentive to declare more income.