Tax system disparities fuel evasion


After processing this year’s tax declarations, the Independent Authority for Public Revenue is expected to demand an additional 3.7 billion euros from some 3 million taxpayers, even though this year’s tax statements for 2018 incomes will lead to tax rebates and handouts adding up to around 3.5 billion euros.

This year’s process is expected to be the biggest redistribution of resources through tax statements in many years, as the two main changes introduced to the system – the separate processing of details for each spouse and the distribution of more income-based handouts than ever – will make for some very acute contrasts.

Most notable is the fact that 1.5 million taxpayers (out of a total of 8.8 million) declaring incomes of more than 15,000 euros in 2018 will cover at least 90 percent of the total tax stemming from the statement processing and get nothing out of the handouts pool. In the meantime, the 7.3 million taxpayers set to declare incomes below 15,000 euros will cover just about 10 percent of the additional taxes imposed while receiving almost the full benefit of the government’s handout policy.

This disparity – attributed to the upcoming elections – is not only the biggest in recent years, but is also seen as an incentive for tax evasion.