ECONOMY

Checks on tax cheats paying off

Almost two-thirds of businesses inspected by the financial crimes squad YPEE were found to have broken the law, prompting officers to slap violators with fines of more than 1 billion euros since the start of the year, the Economy and Finance Ministry said yesterday. YPEE, the Special Inspections Service that belongs to the Finance Ministry, said 534 businesses were checked in popular tourist destinations between August 10 and 16, of which 334 were found to have committed 15,538 offenses. «The percentage of violators reached an average of 62.55 percent and this is considered high,» YPEE said. The checks, conducted on restaurants, nightspots, car rental agencies and hotels, are part of a government crackdown on tax evasion as it tries to lift revenues hit by the slowing economy. Budget revenues in the first six months of the year were 4.2 billion euros short of target as the government hopes for a turnaround in the second half of 2009. The financial crimes squad said it has issued total fines estimated at around 1.05 billion euros so far this year, 15 percent higher than the same period a year earlier. Of this amount, 746.9 million euros were penalties for businesses issuing fake invoices while another 142.5 million euros related to those caught cheating on their value-added tax bill. In one case recently made public, YPEE inspectors paid a surprise visit to a well-known nightspot on Myconos which had declared zero revenue, claiming that 350 patrons on its premises were there for the purposes of a promotional evening. An investigation by YPEE, however, revealed more than 1,500 people on its premises having a good time and some 700,000 euros of undeclared income. Last month, Prime Minister Costas Karamanlis reiterated the conservative government’s determination to tackle tax evasion, despite previous failed attempts. Tax cheats are estimated to each year cost the government 20 billion euros, or some 8 percent of gross domestic product.