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Greek Businesses Evade Tax Man

Clients at Santorini bars live it up but many of the businesses don't pay taxes
Clients at Santorini bars live it up but many of the businesses don’t pay taxes at all

Greece’s hopes of boosting the economy by cutting the Value Added Tax (VAT) in eateries from 23 to 13 percent for a five-month trial are failing from the get-go as inspectors have found about 50 percent of all businesses – mostly restaurants, bars, coffee shops and night clubs – aren’t paying any at all.
Prime Minister Antonis Samaras said the tax would be hiked again if businesses don’t pass on the savings to customers and tourists but so far his plea is largely being ignored as the government was hoping to gain revenues and cut into a deep debt.
Samaras’ coalition government, made up of his New Democracy Conservatives and the PASOK Socialists, has found it can’t collect taxes due and that runaway fraud remains rampant.
Finance Ministry data released Aug. 9 showed that 731 of 1,465 companies checked from July 25 to Aug. 5 had violated tax laws. The highest rate of non-compliance, some 85 percent of those checked, was on the islands of Evia and Skyros. The top tourist destinations of Mykonos, Santorini and Crete had rates of over 56 percent of the businesses investigated.
Authorities have recently ordered 12 businesses to close for a month for outstanding tax violations or resisting inspectors, and are planning to shut down another 14 for similar reasons — including a restaurant on Crete where customers allegedly chased away a team of inspectors this week.
Finance Minister Yannis Stournaras said the government was forced to pass special legislation to enable tax checks on weekends and during the holiday month of August.
“We are engaged in an unprecedented campaign, closing down businesses and legislating,” he said in an interview with Mega TV, a private channel. “You can’t win the fight against tax evasion without carrying out checks.”
Stournaras said that, in some areas, entrepreneurs had not been issuing any receipts at all, concealing revenues and pocketing the sales tax levied on transactions, effectively cheating customers and the government at the same time.
“If this is Greek society’s system of values then I am truly sorry but penalties must be imposed,” he said. “We must all demand receipts.” Taxpayers are encouraged to seek receipts for goods and services purchased — effectively doing the taxman’s job — on pain of paying additional income tax.

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