Law will make withholding of VAT a felony

The government, anxious to apprehend tax dodgers, will turn the non-payment of value-added tax (VAT) into a felony and impose heavier penalties for other types of tax evasion, Economy and Finance Ministry sources said yesterday. The draft law’s text will be finalized in a few days, following a meeting between Economy and Finance Minister Giorgos Alogoskoufis and Justice Minister Anastassis Papaligouras. It will be included in the new tax bill, to be submitted to Parliament alongside the 2007 budget and to be voted on just after the Christmas recess. According to European Union data, tax evasion in Greece is estimated at 30 billion euros annually, or 15 percent of the country’s gross domestic product (GDP). Ministry officials added that the government will also launch an advertising campaign urging citizens to pay their taxes and stop tolerating evasion by others. Officials said that the existence of several, often contradictory laws, and corruption among tax officials were two major factors aiding tax evasion.

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