ECONOMY

Rhodes tops chart of tourism tax evasion

Rhodes and Zakynthos top the list of tourism destinations where there is a high rate of tax evasion among businesses, with at least four in five enterprises on the popular islands dodging taxes in one way or another, according to the Financial Crimes Squad (SDOE).

The first 1,088 inspections this summer, conducted from June 15 to July 15, on eateries, beach and water sports facilities, nightclubs, hotels and other types of rented accommodation found that the violation rate on Rhodes is the highest in the country at 84.62 percent. This is despite the fact that the southeastern Aegean island is benefiting greatly from the increase in tourism this summer.

Zakynthos has an 80 percent violation rate, followed by the Cycladic islands of Santorini (77.14 percent), Tinos (72.73 percent), Paros (68.18 percent) and Syros (57.9 percent). In total, SDOE spotted 538 enterprises around the country that have committed 2,473 violations.

SDOE also focused many of its inspections on luxury accommodation, coming up with some particularly interesting findings. To begin with, SDOE inspectors discovered that the expenditure for the construction of the units they inspected was far greater than what had been declared to tax authorities. Rental rates were also higher than declared and several owners had declared their rental properties as small rural homes in order to secure cheaper electricity rates. In some cases owners had not declared their units as being used for tourism purposes at all.

Of the inspections conducted at over 50 luxury accommodation units, the case of a travel agency that was slapped with 17 violations stands out as it rented luxury villas via the Internet without declaring the transactions to its local tax office at all.

Besides the SDOE raids on the tourism market, labor inspectors from the IKA Social Security Foundation found 1,680 employees without social security from a total of 4,818 inspected in June at 1,345 enterprises of the tourism sector in various resorts around the country. In other words one in every three employees was working without insurance, at a time when the Labor and Tourism ministries have joined forces to run a subsidized employment scheme for 10,000 jobs in the tourism sector.

The total amount of fines imposed for the absence of social security coverage to employees came to 995,000 euros last month, IKA said.