ECONOMY

State coffers see less than two-thirds of value-added tax dues

state-coffers-see-less-than-two-thirds-of-value-added-tax-dues

Less than two-thirds of value-added tax due enters state coffers in Greece, according to a European Union report, as VAT dodging is particularly extensive.

Figures released by Brussels show that for every 100 euros of VAT that should be paid into Greece’s coffers, only 65 euros actually make it. This amounted to lost revenues of more than 6.5 billion euros in 2013, which is considerably less than in previous years owing to the drop in consumption since the onset of the financial crisis.

The report highlights that Greece faces a series of challenges in the area of VAT collection and compliance, while its so-called VAT compliance gap trails the EU average to a considerable extent.

Brussels goes on to recommend that Greece improve the returns of its VAT system, for instance in the telecommunications sector by containing the use of reduced rates and non-obligatory exemptions, as well as broadening the VAT base among telecom users.

In the first five full years of the financial crisis (from 2009 to 2013), the country missed out on VAT revenues adding up to 37 billion euros: This breaks down to 7.5 billion in 2009, 6.9 billion in 2010, 9.1 billion in 2011, 6.8 billion in 2012 and 6.5 billion in 2013, the last year with available data.

The EU member-states with the worst performance record in VAT collection are Romania, Lithuania and Slovakia, according to the report, while the countries with the smallest losses were Finland, the Netherlands and Luxembourg.