Injustices of the Greek Tax System

TaxesAccording to a study conducted by the Foundation for Economic and Industrial Research (IOVE) and the British Hellenic Chamber of Commerce, there are obvious injustices in the Greek tax system. The study shows that 8% of employees with annual wages exceeding 42,000 euros declare 28% of taxable income and pay 70% of taxes.

The study, supervised by the Ministry of Finances consultant professor Nikos Karavitis, stressed the inability of the Greek State to collect taxes. The problem is mostly attributed to the uncontrolled tax evasion, especially amongst freelancers and traders.

The majority of freelancers are declaring that their income is less than 10,000 euros, with 63% claiming their annual income is less than 5,000 euros. The study also showed that 99% of farmers declared an income of less than 10,000 euros, with only one out of a hundred declaring a monthly income greater than 400 euros.

According to the study, 64% of taxpayers are employees and pensioners, who declare 82% of taxable income and pay 78% of taxes.

The study shows that the tax collection system only collects about 56.5% of direct taxes and almost 9 billion euros are not collected. Taxes pay 67.1% of public expenses. That is significantly less than the 82.4% Euro zone average. Direct taxes amount to 24.7% of all taxes, compared to the 29.2% Euro zone average, while indirect taxes amount to 36.9% (31.4% Euro zone average). Finally the average tax on labor is 31.3% in Greece, while it is 38.1% in the Euro zone.


  1. This study is a perfect example why the populists that keep trying to scapegoat only the elite for our tax evasion problems have no idea what they are talking about.

    The reality is the vast majority of tax evaders (in any country) are middle and lower classes Its harder to cheat when wealthy as it usually requires collusion (e.g. accountants that cook books and are prepared to do hard time). All average individuals need to do is fail to declare income or pay for things in cash. It’s pretty hard to buy an expensive yacht with cash and not have the asset traceable back to you whereas its easy to buy basic goods with untaxed cash.

    Unless one addresses the root causes of problem (rather than trying to appeasing self-righteous incompetent populists on a witch hunt)… those problems cannot be solved. All that occurs is fingerpointing in the wrong direction while the issue persists.

  2. How many politicians and large companies are paying taxes before you start looking at the small guys????
    I bet you none are paying so why look at the little guys???
    Politicians are supposed to lead by example so the people do as the politicians do..
    They all work and declare what suits them…
    So who is going to let the cat out the bag as everyone has dirty laundry…
    The only solution is to offer an amnesty and start from today and in the process end permanent employment in the public sector and start a land titles as a way to track it.. and computerise and update everything in the process..But we all know this will never happen in Greece…Not today or ever with the current crop in place..

  3. Don’t be stupid! The majority of taxpayers in Greece are the retirees and the employees simply because their incomes are declared.
    As for offering amnesty, why should they. If you are one of those who has been a pig stealing from the govt then you should pay even more than anyone who has declared at least a large percentage of income.

  4. The tax system in Greece has always been unfair to the wage earners simply because the govt caters to the rich.

  5. This is why it is disgusting to expect expat pensioners to pay huge luxury taxes on pools!

  6. I agree. A pool came with the house when I bought it. Just because I have it doesn’t mean that I have a huge income. Likewise, when I retired here 10 years ago, I bought a good quality 1990 cc “Jeep” style vehicle. Every year I have had to pay considerable sums in circulation tax. Again, just because I bought it then, doesn’t mean that I have a large income now. The current value of that vehicle is peanuts. The circulation tax due thereupon is a ridiculous percentage.

  7. Why does anyone expect any fairness in taxation from Greekistan? Politicians change tax more often then they change their underwear and have no idea of the consequences other then it makes them look like they are doing something,

  8. Did you not know there would be a tax liability when you considered purchasing your home and vehicle?

  9. Everyone is accountable for paying taxes. It is the right and duty of every taxpayer to pay the minimum tax legally required of them based upon their income, property, etc.. I have yet to see anyone make a voluntary cash contribution to the taxing authorities more than what they are required to pay.

  10. I knew that there would be a circulation tax on the car. However, over the years, it has risen to an obnoxious level. Because of the car and the pool, I have to show the importation of a certain level of funds which I do, each year.
    I did not know that there would be wealth taxes on the pool and car. As I mentioned earlier, the value of the car has now depreciated to such a level that the wealth tax thereupon is simply theft.

  11. The pool tax avoidance scam was well publicized and many chose to buy pool covers that masked the pools existence. But to no avail as eventually they will be found and a punitive tax will be levied. The vehicle tax has been a long running saga of taxes based upon the engine size, year, make and or model. In the current scheme of austerity it is and was presumed that based upon your dwelling and vehicle you can support a certain lifestyle. Today if you are squeezed between a fixed income and rising taxes, then unfortunately you join the tens of thousands caught in this inequity, unable to sell as there are no buyers and no alternative but to seek whatever relief there is like closing/removing the pool and pay the taxes, or face the consequences.

  12. The pool tax was “well publicised” long after most pensioners/expats bought their houses and pools!! When we had our pool built and put in a planning application in 2007, we were told the application fee was high because it was a luxury but once paid, that was it! Like so many other pensioners and expats in Greece, our annual income would now put us on or near the poverty line, BUT our assets here have (bought with many years of taxed wages working in our home countries) indicate to the Greek tax man that we STILL have high incomes. It’s ridiculous and so unfair, apart from the fact that it will put other people from abroad coming here in the future. Although many Greeks might say hurray, we expats invest a lot of money both in the holiday season and throughout the year in the greek economy and help some areas of Greece to survive.

  13. Yes, pay tax on income but not assets if you are an expat and/or pensioner as your property and assets reflect PAST not CURRENT income.

  14. We have a large house because we have worked full time for years and saved for our dream retirement property but our income is now peanuts. We have to live a very frugal life to survive here. However, because we have a large house, the Greek assumption is that we still have good incomes. It’s bonkers! We can’t even sell the place to escape.

  15. And exactly how much better are condition in Vardarstan?

    FYROM didn’t even have an economic meltdown. Its economy has been far worse than Greece for decades. A big part of that is due to the fact morons like yourself let incompetent leaders with small penises distract you with fantasies you are related to ancient Macedonians. (oppressing your own obvious ethnic Bulgarian past)

    Good luck convincing historians around the world ancient Macedonians, founders of the Hellenistic period, spreaders of Greek language, competitors of the Greek-only Olympic games, and self-identifying Greeks… were slavs. I’m sure if enough Gree hating morons recognize you obvious frauds as “ethnic macedonians” ancient Macedonian artifacts will one day rewrite themselves from Greek.