With Greeks facing another round of austerity measures, and furious that tax evaders costing the country $70 billion have continued to escape sacrifice, the country’s international lenders are again pressing the government to do something about it.
A report by the European Union and International Monetary Fund on Dec. 24 complained that professionals especially, such as doctors and lawyers, continue to flout the law and don’t give receipts nor report all their income.
The EU and IMF, along with the European Central Bank, make up the Troika that is supplying Greece with $325 billion in bailout loans that came with attached harsh austerity measures.
Greece has collected just half its tax debts and conducted less than half the audits it was supposed to under the targets set by its lenders, according to a survey by the lenders which was compiled in November.
The lenders urged Greece to improve tax collection and focus on the cases most likely to produce results. “Doctors and lawyers are a good place to start,” they said as they are among the most notorious tax cheats in a country where almost everyone who doesn’t have taxes taken out of their paycheck doesn’t pay.
“The mission expresses concern that authorities are falling idle and that the drive to fight tax evasion by the very wealthy and the free professions is at risk of weakening,” it said. Finance Minister Yiannis Stournaras has been urging mandatory jail time for those convicted of tax evasion as the law now only allows suspended sentences and harsh sentences are rare.
By the end of September authorities had conducted 440 checks on suspected wealthy tax evaders, compared with a full-year target of 1,300. About 1.1 billion euros ($1.45 billion) in overdue taxes have been collected so far, less than the 2 billion euros ($2.64 billion) that was the goal.
Riot police had to be called out to an Athens neighborhood this week to protect tax inspectors who came under attack from shop owners who were said not to be issuing receipts.
With tax revenues falling short of expectations because of big tax hikes as austerity has made Greeks cut back sharply on spending, the government is going after workers instead of tax evaders, many of whom Greeks suspect are wealthy and politically-connected.
After a Christmas recess, parliament is expected to pass a new tax law which aims to raise about 2.5 billion euros ($3.3 billion) over the next two years as part of a 13.5 billion euros ($17.45 billion) austerity package that Prime Minister Antonis Samaras vowed would be the last. He said the government will finally make going after tax evaders a priority.
In the meantime, however, the government is set to introduce a reform that would create only four tax brackets but put a tax of 40 percent on middle-income families and add a 22 percent surcharge for those who don’t provide tax receipts equivalent to 25 percent of their income.
(Source: Reuters)
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