Tax evasion is rampant in Greece and many entrepreneurs blatantly ignore Finance Ministry inspectors, considering themselves untouchable, as Minister Yannis Stournaras described them when giving the order for their strict monitoring this week.
Indeed, there are some who go as far as to throw the inspectors off their premises, and if at first they fail to do so, they pull strings in order to have their fines reduced, as well as complaining that the Financial Crime Squad (SDOE) “dared” to cross their threshold.
Thankfully, there are monitoring employees who are willing to chase after tax evasion, prepare inspection strategies and storm in when there are indications of suspicious transactions. Officials at the General Secretariat for Public Revenues stress that the monitoring will not stop. “We do run into problems,” said one, “but we will make it.”
They also have to deal with those who warn “the untouchables” of the inspectors’ activities. For instance, Finance Ministry inspectors visited two nightclubs in southern Athens last Saturday. In the first instance the turnover on the night of the inspection amounted to 40,000 euros, although the previous night, without the presence of the SDOE inspectors, the registered turnover barely reached 17,000 euros. A ministry official said that on the eve of the inspection there had been just 50 fewer people at the club than on inspection night, which did not justify the major difference in the sales volume. At another club, the turnover on the night of the SDOE inspection reached 60,000 euros, considerably higher than in previous days.
As a result of such discrepancies, inspectors now ask for the figures from the previous 30 to 40 days, something which has helped establish that receipts are mostly issued when SDOE storms in.
Repeat VAT dodgers have found new tricks. For example, before taxpayers were told to start collecting receipts a few years ago, many owners of enterprises in the food service business would give patrons an order slip instead of the actual receipt. Now, however, they issue receipts for less than the actual bill.
Others tamper with their cash registers: A customer may get a receipt saying he paid 4 euros for his coffee, but the cash register will record a lesser amount, which means that the entrepreneur will pay less to the state in taxes, frequently remaining below the tax-free threshold. Cash registers that have been tampered with are often programmed in a way that cannot be detected easily by inspectors. A top Finance Ministry official said that there have been two such cases in Plaka, one of the most popular spots in Athens for tourists.
Meanwhile, one businessman on the island of Paros did not hide his joy recently at the restructuring of Greece’s tax office network and the reduction of VAT in catering, saying that he will now pay even less VAT to the state while continuing not to issue the correct receipts. He added that he is not afraid of any inspections as his local tax authority is now on the neighboring island of Naxos while its monitoring department is on Syros, and there is no ferry link between Syros and Paros. Notably, inspectors get paid around 35 euros a day and have to cover their own travel expenses, which would explain why few are keen on making long journeys to conduct inspections.
If anything, Attica can boast it has the most compliant businesses, as only 60 percent of businesses inspected by SDOE were found to have violated tax regulations between July 16 and 22. The rate on Paros stands at 75.76 percent, on Santorini at 79.3 percent, with Fokida on 80 percent and Evia on 100 percent.