ECONOMY

Tax-evasion battle starts with yachts

BRUSSELS – The extent of tax evasion in Greece became apparent in Eurostat data on tax revenues for 2007 that were released yesterday. The tax paid amounted to just 32.1 percent of Greece’s gross domestic product, against a European Union average of 39.8 percent. The contrast becomes even starker when the Greek figures are compared with those of the eurozone, where tax revenues amount to 40.4 percent of GDP. Worse, the percentage has declined from 34.6 percent in 2000, with that 2.5 percent difference likely to have proven crucial in the calculation of the deficit. The data reveal that the real tax burden on labor, i.e. social security contributions and the income tax of salaried workers in Greece (35.5 percent), is above the EU average (34.4 percent) and that of the eurozone (34.3 percent). In contrast, the rate of consumption tax in Greece (15.4 percent) is far less than that in the EU (22.2 percent), while capital tax in Greece stands at 15.9 percent against 25.7 percent in the EU. In its bid to beat tax evasion, the Greek government yesterday announced the first in a new raft of measures. Economy Minister Yiannis Papathanassiou said the purchase of tax-free fuel for owners of big yachts has been abolished, while the tax will be returned to genuine professionals after a check of rental contracts, with the latter becoming another document to illustrate living standards to the tax authorities.