Tax, social security cheats cost over 21 bln euros a year
Tax dodgers and businesses not paying social security contributions are costing the country each year more than 21 billion euros, or some 10 percent of gross domestic product (GDP), according to National Economy and Finance Minister Giorgos Alogoskoufis. Alogoskoufis, who was addressing a national council appointed the task of fighting tax evasion, said that the problem is made much worse due to adverse economic conditions that weigh on broader business activity and tax revenues. «Revenues from direct taxes has been steadily hitting rock bottom in the last few years,» he said yesterday. According to Finance Ministry data, tax revenues in Greece, as a percentage of GDP, are lower than in other countries considered to be tax havens. Despite the fact that Greek tax rates stand at average European Union levels, revenues from direct taxes in 2006 reached 4.6 percent of GDP. The respective figure in the EU amounted to 9.2 percent of GDP. «This means that we have extensive tax evasion, which, according to data, is mostly related to the self employed, sole business owners and capital amounts,» said the minister. The conservative government has recently introduced measures aimed at catching cheats, such as upping the duties payable on different types of fuel, but more action is needed, admitted the minister. According to data from the first six months of the year, Greek budget revenues rose 5.7 percent, falling well short of the targeted 12.1 percent annual growth rate in a sign the government may soon be forced to revise its 2008 fiscal goals. Ministry sources have indicated the government is looking into ways to up revenues by increasing audits and offering more favorable terms to those with large tax debts.
