The ministries of Finance and Labor revealed on Friday many cases of systematic fraud by entrepreneurs who coveted the state’s support measures that were intended to guard against the impact of the pandemic, such as cheap loans and the special-purpose compensation. They have now referred all those cases to the justice system.
For instance, a meat trader in the Peloponnese who declared an annual turnover of just 3,000 euros for 2019, suddenly amended his income tax declaration to show his turnover was €1.9 million that year, in order to show a major drop in 2020 and qualify for a large state loan, known as the “Deposit To Be Returned.”
In another example, a hotel in Thessaly had submitted value-added tax declarations concerning zero turnover in 2020. Before the start of the fifth phase of the cheap state loans program it suddenly declared turnover of €3 million for 2019 and €1 million for 2020.
Sources from the Finance Ministry say that inspections by the Independent Authority for Public Revenue have identified about 120-130 cases of major fraud, though this is a small number compared to the 500,000 who have benefited.
An estimated 2-2.5% of the support granted has made it into the hands of fraudsters, translating into about €180 million, from the loans scheme that has disbursed some €7.5 billion.
The typical trick with the Deposit To Be Returned has been the amendment of turnover for 2019, but without the corresponding earnings, as that would have led to additional tax dues. As a result, the ministry will not accept any amended income tax declarations for the 2019 financial year in weighing the applications for the seventh and final phase of the Deposit To Be Returned.
The Labor Ministry also reported a host of cases of fraud, such as a cafe whose premises were just 25 square meters but its owner declared it had 150 staff, so as to pocket the special-purpose compensations of €534 per employee per month. The ministry will now introduce ceilings to stop the phenomena of fake hirings and bogus working hours.