BUSINESS

Tax dodgers sapping Greek state’s payroll funding

PROKOPIS HATZINIKOLAOU

TAGS: Taxation, Finance

The Greek state loses some 16 billion euros a year as a result of tax evasion, an amount that could cover the cost of civil service salaries and pensions, which comes to an annual 15 billion euros.

Data from a recent study by think tank Dianeosis, presented on Skai TV on Wednesday, show that tax evasion in Greece comes to 6-9 percent of gross domestic product per annum, or as much as 32 percent of total state expenditure.

The study also found that in the 2010-15 period, revenues from indirect taxes shrank by 7.29 billion euros (-23 percent), despite several hikes in consumption taxes, indicating that the loss in revenues is the result of GDP contraction but also a spike in tax dodging that was exacerbated by overtaxation.

In contrast, revenues from direct taxes showed smaller losses over the same period, dropping to 19.76 billion euros from 20.15 billion euros. This is explained by measures making it harder for salaried workers to hide their earnings as well as tax increases.

The study in particular notes the drop in revenues from value-added tax in the 2010-15 period, finding that 3.45 billion euros were lost because of GDP contraction and tax evasion.

Revenues from taxes on fuel also showed a significant decline, from 5.7 billion to 4.18 billion euros. Losses from taxes on tobacco products, meanwhile, came close to 540 million euros.

Frequent changes in the tax system and complicated and often conflicting legislation are also perceived as exacerbating the problem of tax evasion.

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