“I heard somewhere” that cheating on taxes is WIDE spread in Greece, and if Greece just collected the taxes that are really due their present financial mess would have been greatly reduced if not completely avoided.
Claim - people regularly lie about their income. On property taxes; in one area only 160 homes acknowledged having swimming pools, but a study done using Google Maps found thousands. Etc. Etc.
Any truth to this tax situation?
If so, don’t they have some outfit like the US’ IRS that does audits, imposes penalties, etc?
According to this New York Times article, tax evasion in Greece is widespread. It says, “Various studies, including one by the Federation of Greek Industries last year, have estimated that the government may be losing as much as $30 billion a year to tax evasion — a figure that would have gone a long way to solving its debt problems.” The article mentions the story about the under-reporting of swimming pools.
Here in Greece, taxes on some things are absurdly high. This creates several strange situations. One is that some types of businesses cannot sustain themselves without some degree of tax evasion. Another is that when taxes go past some level, then it becomes very tempting to avoid paying them and take your chances of getting caught.
Example: A doctor friend of mine charges 100 euros per visit. Turns out 67% of that amount is various taxes; only 33 euros go in his pocket. So he charges 50 euros without a receipt and both parties are happy: the patient pays only half and the doctor gets 17 euros more.
In my opinion, tax evasion is a small part of the problem. The biggest causes are the bloated public sector with their absurd pension packages, and the unions (backed by the communist party) which have destroyed every single sector of industry with their ridiculous demands.
It may be worth noting that if they suddenly find a way to end that evasion and start collecting an additional $30 billion/year, the effect on the economy will be harsh.
To clarify, I think this means that you feel harsh options are well worth considering. This is no doubt correct.
But my point would be that if the Greek govt. finds a way to extract an additional $30B annually from its already beleaguered economy, no one should expect the economy to easily bear this. There would likely be a significant drop in business activity and thus employment - IOW, additional recession symptoms.