ECONOMY

South Korean model for revenues

The government is examining the South Korean model of encouraging electronic transactions to combat tax evasion, following a recommendation by the Center of Planning and Economic Research (KEPE).

The center?s study is expected to form the main pillar of the reformed tax system as it recommends the offer of incentives for electronic transactions.

In a period of deep recession, South Korea offered significant tax exemptions both to tradesmen and consumers for using plastic money, while rendering the use of cards for transactions above a certain amount compulsory.

KEPE proposes the introduction of a tax discount or return for the purchases through credit or debit cards as an incentive. Alternatively, KEPE recommends the reduction of value-added tax for tradesmen as an incentive for electronic transactions.

A recent report by the Organization for Economic Cooperation and Development (OECD) showed that Greece does not cash in about 30 percent of the VAT it should receive from taxpayers, while the equivalent average in the European Union amounts to just 12 percent. Greece has the second-worst record in this respect.