After international lenders rejected a plan to let Greeks with undeclared income abroad return the money to Greece and pay only an 8 percent penalty, the government has now devised another scheme: giving the tax cheats incentive deposit their funds in foreign countries in Greek banks.
Government officials are planning to hold talks with representatives of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) to go over the latest plan aimed at tax cheats who owe the country $70 billion and have mostly escaped prosecution or sacrifice during a crushing economic crisis in which pay cuts, tax hikes and slashed pensions have been put on workers, pensioners and the poor instead.
The newspaper Kathimerini reported, however, that the government is keen to avoid the perception that giving incentives to people who haven’t paid taxes and keep their money in foreign countries is seen as an amnesty. Instead, the proposal would be that the depositors would pay only a small fine if they bring their money back to their homeland.
It’s not unlawful to have foreign bank accounts if taxes are paid, but critics have said many Greeks use banks in other countries to avoid paying taxes. A list of 2,062 Greeks with $1.95 billion in secret accounts in the Geneva, Switzerland branch of HSBC still hasn’t been checked for possible tax evasion after more than two years.
Instead, the government is investigating former finance minister George Papaconstantinou, who held the list first, because the names of three of his relatives had been removed. His successor as finance chief and now the PASOK Socialist leader, Evangelos Venizelos, also had the list on a memory stick but isn’t being probed because critics said as a partner in Prime Minister Antonis Samaras’ uneasy coalition that he is being protected.
Kathimerini said that the government also plans to announce the plan at the same time as the creation of Greece’s first assets register, which will be used as a tool to clamp down on tax dodgers, although it’s uncertain if the Troika will go along with it. In November 2012, the government had proposed that Greeks seeking to repatriate undeclared earnings pay a fine amounting to 8 percent of the total to avoid any further legal action or penalties, immediately killed by the Troika.
EU Task Force officials had suggested at the time that such a measure could only be accepted if Greece’s tax inspection system was able to pursue all those with undeclared assets who did not take up the amnesty offer. Despite repeated promises and vows, and apart from some arrests, Greece has failed to go after major tax cheats and not a single one has been prosecuted.