ECONOMY

Fresh offensive on tax evasion

The government yesterday issued a further warning to anyone evading taxation or wasting state money, while noting there will also be fair measures for households and businesses that have been hit by the financial crisis. Speaking at a press conference, Finance Minister Giorgos Papaconstantinou said that the measures will involve the broadening of the tax base by combating tax evasion, inspecting economic activities on the basis of objective criteria and applying source of wealth checks on all taxpayers. Inspections using objective criteria will be conducted based on the average income declared by each occupational sector to the state, chambers of commerce and consultancy companies. For instance, if the average income for electricians stands at 15,000 euros, anyone stating below that amount will automatically be placed in the focus of the ministry’s auditing mechanisms. In practice, the state will use sector studies to gain a full picture of each occupational domain. This follows the American pattern in revenue monitoring, which is based on the average stated income and spending per sector. Papaconstantinou also confirmed yesterday that there will be tax hikes on tobacco and alcohol, as already envisioned in the draft budget. Asked whether there would be more increases in indirect taxation, the minister answered that there is no such provision in the draft budget. However, he added that the possibility of a budget amendment or the submission of a supplementary budget would allow for stricter measures in matters of direct and indirect taxation. Papaconstantinou stressed in particular that the government will do everything to honor its commitments to the European Union. In essence, this statement is seen as a hint at additional measures to bolster tax revenue.