BUSINESS

Plan for hidden income declaration freezes

PROKOPIS HATZINIKOLAOU

TAGS: Finance, Taxation

The government’s plans for offering incentives to persuade taxpayers to declare hidden incomes in Greece and abroad, along with those for the creation of the Asset Register (Periousiologio) have been put on hold.

Greece’s creditors, and particularly the International Monetary Fund, are against the introduction of such favorable clauses for tax dodgers and providing for the repatriation of capital from other European Union member-states.

Sources say that the Finance Ministry had proposed the provision of incentives to those who voluntarily declared untaxed incomes and that those funds be placed in any EU country. (Therefore if the money was in another EU state it could stay there, but if it was in Switzerland it would have to be transferred to an EU country.)

The proposal was turned down by the creditors, who insist that Greece should not offer incentives to tax evaders, especially if this involves major tax discounts. However, the government’s response is that no one will come forward if they then have to pay taxes and fines adding up to 50 percent of the undeclared incomes.

In this context, the heads of the creditors’ missions have asked the Greek authorities to activate interstate agreements concerning the exchange of information aimed at identifying Greek taxpayers with large deposits abroad. The only concession the creditors are prepared to accept is the provision of small incentives, such as the exemption from additional fines, but without a penal amnesty for tax dodgers.

Consequently, the plan for the voluntary declaration of incomes has been shelved for now, unless another solution is found for it to be revived. A senior ministry official said that “there is no chance of seeing anyone declare a hidden 2 million euros [if they know] the state will take 1 million. It will be a failed regulation from its inception.”

The same official added that this will make the creation of the Asset Register impossible as the General Secretariat of Public Revenue will be unable to create a reliable database of taxpayers’ assets.

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