While the Greek government has vowed – yet again – to crack down on tax cheats costing the country more than $70 billion, tax evasion is rising, especially among professionals who are keeping taxes they collect from customers and not paying the government, the newspaper Kathimerini reported.
With business falling off a cliff during the country’s deep recession caused by austerity measures demanded by international lenders in return for bailouts, more professionals are using the 23 percent Value Added Tax (VAT) that customers pay in a desperate bid to keep cash flow going.
Despite the theft of tax revenues, they are not being prosecuted, it was reported, only being forced to pay fines. The beleaguered Financial Crimes Squad (SDOE), which is floundering in the aftermath of two former directors being questioned for their failure to check for tax cheats in a list of Greeks with secret Swiss bank accounts, said it had a 51 percent hike in the fines imposed on violators in January.
Those often are not paid either. The levied fines – not the amount actually collected – was 35.3 million euros ($47.5 million) compared to 23.3 million euros ($31.4 million)in January 2012. In total the fines imposed by SDOE inspectors last month amounted to 258 million euros ($347.7 million,) from 217.4 million euros ($293 million) in January 2012.
While there were more inspections conducted (1,559 against 1,460) and while more fines were imposed, fewer violators were identified. Tax inspectors have been accused of taking bribes in return for letting tax violators escape punishment.
In January 2012 the violations numbered 5,332, while last month there were just 2,999, mostly for issuing fake financial data to defraud the government. It was not reported if anyone was prosecuted for the crimes. Kathimerini said it’s doubtful the fines – just as the taxes – will be collected either as past experience shows the tax cheats ignore the fines and keep stealing the tax revenues.
The wobbly coalition government led by Prime Minister Antonis Samaras has relied on imposing pay cuts, tax hikes and slashed pensions on workers, pensioners and the poor instead of prosecuting tax cheats. He has told Greece’s lenders he will soon start going after tax evaders but the government still hasn’t checked the list of 2,062 Greeks with $1.95 billion in accounts in the Geneva branch of HSBC for violators.