BUSINESS

Black economy amounts to 30 pct of GDP

Tax evasion amounts to 4 percent of the country?s gross domestic product every year, according to a report by the Bank of Greece published on Monday.

At the same time the illegal economy comes close to 30 percent of GDP, the report estimates, including uninsured work that amounts to 25 percent of all labor.

There have been no efforts made in the last few years to contain tax evasion as well as uninsured work, which in this crucial period has resulted in problems in the collection of taxes, while social security funds are strained and require more funds from the state budget.

A recent study on taxation estimated that all taxpayers declare at least 10 percent less of their taxable income, resulting in a 26 percent loss in tax revenues. The same study found that the self-employed and farmers, who declare an average of 33 percent less than their actual income, are responsible for the bulk of tax evasion.

The BoG report proposes a number of measures such as: simplifying legislation with the creation of a flexible and rational legal framework; a revision of the 980 tax exemptions that apply today; the systematic electronic monitoring of properties, consumer spending and debts of taxpayers to the state through an online link to the Finance Ministry?s Elenxis system; and the introduction of a ?single personal identification number? for each citizen.

The report further recommends sacking all auditors implicated in bribery or a ban on their return to the public sector, a full separation of the tax auditing mechanisms from the tax collection agencies, the limiting of the sizable number of local tax offices and the full automation of basic tax operations.

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