Tax violations are projected to exceed 20 percent this year

The incidence of tax-code violations among firms and the self-employed seems to be on the increase despite an apparent slowdown in the first quarter of 2002, according to official data released yesterday. Violations rose from an average of 17.9 percent in the main sectors of economic activity in 2000 to 23.6 percent in 2001, Dimitris Batzelis, special secretary of the Financial Crimes Squad (SDOE) told a press briefing. The incidence of tax evasion in the first quarter of 2002 was 19 percent, but is projected to rise higher in coming months, he said. According to SDOE data, the violation rates in 2001 were 25 percent among the self-employed, 28 percent among clubs and bars, 34 percent among firms in the services sector, 31 percent in the tourism sector, 25 percent in the wholesale trade, 30 percent in the retail trade, and 35 percent among construction companies. In the first quarter of 2002 the rates were 19 percent among the self-employed, 30 percent among clubs and bars, 32 percent among tourism enterprises, and 25 percent among retail firms. Batzelis identified four main sources of tax evasion, which he labeled «the gangrene of the Greek economy»: First, through large and midsized enterprises issuing bogus receipts. In 2001, SDOE intercepted 6,200 such receipts totaling 21 billion drachmas in value without VAT. These were issued by 400 firms, which means that the number of recipients was much larger. Second, among self-employed professionals, particularly doctors and lawyers. Third, evasion of customs duties, where the incidence of violations is estimated at 13 percent. According to SDOE, about 1.5 million tons of heating diesel annually is smuggled and used as automotive diesel, which causes a loss of revenues totaling about 350 million euros. Batzelis said the Finance Ministry is considering countermeasures including the introduction of automatic teller machines in gasoline stations. The fourth key source is offshore companies. About 3,000 such companies appear as owners of only one property item, shielding the individual owners from paying taxes. A bill is being drafted to tackle the problem. Batzelis said SDOE plans a summer campaign against tax evasion in tourist areas. Such a campaign last year showed a 35-percent violation rate in the Cycladic islands. This year, inspection rounds during five-day school trips to Rhodes showed a violation rate of 40 percent. SDOE also found last year that the Association of Professional Football Clubs, which organizes the championship, had failed to pay VAT amounting to 650 million drachmas (1.9 million euros). Smaller amounts were owed by football clubs Panionios, Aris, Iraklis and Panachaiki. In a related development, the Finance Ministry said that after the expiry yesterday of the deadline for the submission of optional statements by 750,000 small and midsized firms and self-employed professionals to establish agreement between income and VAT paid in the last three years, tax officials today will launch inspections in earnest. Only 120,000 filed statements and late submissions are subject to a 45-75 euro surcharge. – Panamax in the Atlantic still at good demand with Pan Ocean having fixed M/V «Hephaistos,» 74,300 dwt, built 2002, delivery Amsterdam May 18, trip via Finland, redelivery Far East at USD 10,500 daily, while M/V «Afovos,» 74,306 dwt, built 2001, delivery Spain May 20-25 for 3.5 months trading, has fixed at USD 9,650 daily.