The wrong solution

COMMENT

The government’s decision to raise value-added tax on catering services and on the Greek islands has proved to be a very serious mistake.

To begin with, taxpayers who obey the law are now desperate as the tax bills they now have to foot are simply much too high, considering all of the additional levies they have had to fork out for.

On the other side you have the tax cheats, people and businesses that have systematically dodged paying their dues and continue to do so with impunity because the government has proved unable to effectively address the problem of tax evasion.

Ultimately, the result of the aforementioned decision – made to drum up much-needed revenues – has been that Greece is losing its competitive edge, particularly in tourism, and the country’s productive forces are weakened even further, not to mention the gains that will be made by the shadow economy.

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