The government slammed on Thursday a call by the catering industry to freeze value added tax payments, as a hike from 13 percent to 23 percent came into force.
?Those who consider that violating the law is the best method for extricating the country from the crisis and the economy from recession are making a provocative and deliberate mistake,? said the Finance Ministry in a statement.
A considerable number of businesses in the catering industry yesterday appeared to support the call by their nationwide professional association for a freeze in payments.
In a radio interview on Wednesday, Finance Minister Evangelos Venizelos acknowledged that the measure was hard for many of the country?s 210,000 catering establishments, from restaurants to sidewalk canteens. He added, however, that a rationalization of VAT sources was not possible before next year.
?There are measures that are contradictory, unfair, inequitable. We could have looked for an equivalent measure, for instance, the abolition of tax rebates to categories of taxpayers who evidently evade their dues. Unfortunately, we could not do it this year; we will do it from 2012,? he told Real FM.
Venizelos said such injustices would be tackled in the framework of the overhauled National Tax System, a debate for which is planned to start soon.
He appeared confident that the hike would yield the targeted sum of 750 million euros annually, and said he would be prepared to discuss a drastic cut in the high 23 percent rate, ?if we agree on simple mechanisms for collecting VAT.?
?If all citizens, as conscientious consumers, demanded receipts, then we would hit part of the colossal underground economy and tax evasion in the catering industry.?
He pointed out that in 2010, businesses paid total taxes of 2.5 billion euros while income tax yielded 9 billion.
?Of the 100 billion of declared incomes 70 are exempted from tax due to legal provisions, and the remaining 30 billion are taxed at 30 percent on average. If we taxed 130 billion euros of income at 15 percent and tackled a small measure of tax evasion, then we would have solved the problem of public revenues,? he noted.
Separately, the Finance Ministry said it would publicize the names of taxpayers who owed the state more than 150,000 euros for over a year.