Introducing a tax amnesty, exempting household investment up to an annual ceiling from the taxable income, and the protection and support of whistleblowers are among the measures that shadow economy expert Dr Friedrich Schneider proposed to help Greece combat the illegal economy and and tax evasion on Monday at the 11th Athens Tax Forum, organized by the American Hellenic Chamber of Commerce.
The economics professor at the Johannes Kepler University of Linz, Austria, said that persuading tax dodgers to pay their taxes is key, so an amnesty would be necessary for them, especially those who have sent their capital abroad to avoid paying tax: “If untaxed incomes are declared and/or brought back to Greece, a flat rate of 25 or 30 percent should be paid. That’s it! Afterward a high punishment should be installed.”
Schneider described a series of moves that could contain tax evasion, including the introduction of a monetary incentive for tax collectors: “For example, 5 percent of those additionally collected revenues could be distributed to them and/or be used to buy better equipment for them.”
The Austrian professor also proposed a fixed amount of tax for small and medium-sized enterprises with a turnover up to 50,000 euros per year, whereby SMEs with a turnover between 15,000 and 30,000 euros pay 1,000 euros and those between 30,000-50,000 euros pay 5,000 euros. That would mean the tax authorities would only need to check each company’s turnover. Household investment up to a certain ceiling should be tax-exempt, he added. In Germany that ceiling is 1,200 euros per year.
Firms that are found to have used bribery or that are corrupt ought to be banned from state contracts for three to five years, said Schneider, calling also for government institutions to support whistleblowers. “Incentives should be provided for the detection of corruption. Moreover a protection scheme should be developed for these people,” he said.
Chamber head Simos Anastasopoulos said the country is on a razor’s edge, with enterprises being asked to operate in unprecedented conditions of uncertainty and zero liquidity, adding that “only through the development of the private economy and investments can new jobs and revenues for the state be created.”