As Greek Prime Minister Antonis Samaras’ shaky coalition government seeks to hammer out $14.16 billion in cuts demanded by international lenders – with workers, pensioners and the poor set to take another blow – a study conducted by a team of researchers from the University of Chicago said the country could have brought in more almost that exact amount if it had taxed $35 billion in unreported incomes from tax evaders in 2009.
That was a year before then-Prime Minister George Papandreou went hat-in-hand to the International Monetary Fund, asking for a bailout that set in motion two years of protests, strikes and riots that brought down his government but hasn’t solved the country’s economic crisis.
The researchers said if Greece had collected all the taxes due it would have generated revenues of 11.2 billion euros, or some $14 billion, almost precisely what Prime Minister Antonis Samara’s uneasy coalition government is seeking to cut from its budget on the order of international lenders putting up $325 billion in bailout loans.
The money reflects only the unreported incomes of particular self-employed individuals, such as doctors, dentists, veterinarians, lawyers, architects, engineers, topographer engineers, economists, business consultants, tax auditors and accountants, who are most likely to evade taxes, the reseachers said, although in Greece only those who have taxes taken out of their checks, such as public workers, are paying most or the taxes.
On average, the unreported incomes rate account for 11.9 percent of the income that could be realized. Comparing the reported revenues and the respective loan liabilities of self-employed individuals in Greece it was revealed that their real incomes were 1.92 times higher than reported, not uncommon in a country where many doctors report their annual income is less than $15,000 although they own numerous properties. According to other findings of the study, in some areas of Greece tax evasion can even reach 68 percent. The areas with the highest rate of evasion are Crete, Attica, the Peloponnese and the city of Larissa.