Greece's Efforts to Limit Tax Evasion Have Little Success
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ATHENS -- The agents from the Financial and Economic Crime Unit slipped in on a holiday evening recently, taking some of the tall seats at the crowded bar in the Three Little Pigs Cafe here.
Soon, however, they were asking customers to show their receipts -- an indication that the trendy night spot was paying value-added taxes. But the agents were not satisfied. Armed with a new law devised to help Greece crack down on tax cheats, the agents shut the cafe for the next 48 hours because, they said, receipts were missing. Across the city, other restaurants and nightclubs were also being padlocked, their names showing up in the local newspapers, their front doors sealed for all to see.
The highly visible campaign against cafes and night spots is only one of the many efforts Greek authorities have made over the past year to change what has long been a way of life in this country -- rampant tax evasion. But so far, to little avail.
"We have learned a lot," said Ilias Plaskovitis, the general secretary of the Finance Ministry. "We have had great success in identifying who owes taxes, but much less in collecting them."
A lot is at stake. Various studies have estimated that Greece may be losing as much as $30 billion a year to tax evasion -- an amount that would have gone a long way to solving its debt problems.
Last spring, Greek officials were confident they could quickly improve tax collection. Officials chafed when the International Monetary Fund would allow them to budget only an additional $1.6 billion based on projected increases in tax revenues. It was a figure that Mr. Plaskovitis expected would be easily surpassed.
The head of the Financial and Economic Crime Unit, Ioannis Kapeleris, said the agency had issued bills and fines for unpaid taxes totaling $6.5 billion last year, up from $2.2 billion in 2009.
First Published February 21, 2011 12:01 am
