As Greece struggles with growing reports of Greeks with deposits in foreign banks in Switzerland, Luxembourg and Lichtenstein – and possibly other countries – that haven’t been vetted for possible tax evasion, the country’s international lenders have rejected a plan to grant the depositors amnesty in return for an 8 percent tax rate – far below thresholds of 40 percent or more that will be assessed on middle class taxpayers.
The Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) declared the idea a non-starter and kicked it back to Greek authorities with a warning that the government should chase tax evaders instead of excusing them.
Troika officials told Finance Minister Yannis Stournaras that they cannot authorize the measure without safeguarding that this will be the last such move. “In order to secure that, there should be a tax collection mechanism capable of issuing a credible threat and that will locate and catch those with untaxed deposits in foreign banks who do not opt to request amnesty status,” a member of the creditors’ technical team in Greece told the newspaper Kathimerini.
“Such clauses regarding deposits have been repeatedly introduced since 2011, but are not always faithfully implemented,” a European diplomatic source told the newspaper. “That would constitute backtracking,” said another foreign official. Asked what he would do instead, he said he would check whether the taxpayers concerned had other properties (i.e. real estate, bank accounts etc) and proceed to confiscation up to the level of their tax debts.
The move to largely forgive foreign depositors who haven’t been checked to see if they’ve paid taxes as required comes as the government is dealing with a series of scandals, including that involving 2,062 Greeks with $1.95 billion in deposits in the Geneva, Switzerland branch of HSBC.
Former finance minister George Papaconstantinou is being investigated as part of a probe to determine who removed the names of three of his relatives from a list of the depositors given Greece in 2010 that has been set aside without checking whether taxes had been paid. The government is imposing another round of pay cuts, tax hikes and slashed pensions on workers, pensioners and the poor and has largely ignored Troika entreaties to go after tax cheats.
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