Officials are to begin putting together an emergency plan to boost state coffers, which is likely to involve adjustment to some VAT rates and more intense inspections on businesses, after an alarming shortfall in tax revenues, Finance Ministry sources told Sunday’s Kathimerini.

The move comes after the government’s announcement last week that VAT receipts for January and February had fallen by some 12 percent this year compared to last. Economy and Finance Minister Giorgos Alogoskoufis blamed the drop on the black market trade in fuel and cigarettes.

Sources indicated that the government is now considering an increase in cigarette taxes and bringing the VAT charges on certain products up to the full rate of 18 percent. Books, for example, are currently taxed at 4 percent and newspapers at 8 percent.

Finance Ministry sources said that it was unacceptable for the country’s gross domestic product to have risen over the last year and for income from VAT to have fallen over the same period. A recent ministry study estimated that the government missed out on some 400 million euros in takings last year due to illegal trade in heating oil.

Another contributing factor is the institutional limbo in which the government has been caught up with regard to conducting checks on businesses. The Finance Ministry announced three weeks ago that it was in the final stages of creating the Special Investigation Service (SIS) — a new body to focus on tax evasion, illegal trade and financial crime, particularly electronic theft.

In the meantime, however, it appears that checks by the current Financial Crimes Squad (SDOE) have slackened due to the impending changeover. As a result, Alogoskoufis is now said to have asked SDOE to intensify its investigations into as many as 11,000 firms.