Greeks spend €40 billion more than they declare as income, Bank of Greece governor Yannis Stournaras told the 19th annual Tax Forum of the American-Hellenic Chamber of Commerce Tuesday.
This difference reflects the size of the grey economy Stournaras said, adding that the latest data, from 2021 incomes and expenditures put that size at 20.9% of GDP. It is also a reliable gauge of tax evasion, although evasion and the gray economy are not one and the same, Stournaras remarked.
In the period 2015-21, this excess spending ranged from €36 billion to €49 billion, the central banker said.
Total declared income for 2021 was about €84 billion, of which 79% came from salaried workers, including merchant marine employees. These categories, who can’t hide their income, which is taxed at its source, pay disproportionately high taxes.
About 70% of taxpayers engaged in a form of business activity, or who are self-employed declare annual incomes less than €10,000. And 37% of individual taxpayers declare income of up to €5,000.
That the self-employed and very small enterprises disproportionately hide their incomes is not unique to Greece; it happens in almost every country, Stournaras said.
Of course, the very rich have their own ways to avoid paying taxes, through offshore companies and use of dummy invoices.
Tax avoidance extends to indirect taxes: in 2020, Greece was 4th among EU members in non-payments of Value Added Tax; the lag between expected VAT receipts and actual ones is estimated at 19.7% or about €3 billion. Still, Stournaras said, there has been progress on that front as a result of the pressure to adopt electronic payment methods.
What can be done to fight tax evasion? Stournaras had six proposals: expand electronic transactions to cover more economic activities; provide incentives for payments by credit or debit cards and through the banking system; offer tax breaks to those who reveal undeclared transactions, especially in sectors with proven high levels of tax evasion; continual upgrading of the Public Revenue Authority’s electronic transaction monitoring systems; provide a stable, and simplified, tax regime; and intensify efforts to create a culture of income accountability.
I ll give you some examples on how extreme is tax evasion in greece.
A plumber can come and do his work at a house for a couple of hours and he will charge you 100 euro without receipt and 125 with receipt. This person will declare at most 9k or 10k a year which is under the minimum wage. Doctors, electricians, lawyers, personal trainers etc do the same. They have FUCK YOU money and they dont get taxed.
So when you hear that the average salary in greece is like 1000 euro add at least 30 to 40%. Thats what it shows not what enters the pocket.
The only ones who cant tax evade are the public servants.
Recently measures were taken to reduce tax evasion and to be fair it is reduced but how the mindset will change is a mystery.
How does the size of the grey economy in Greece compare to other EU countries?
Oh it’s the same in Belgium. Those who are sel employed or have businesses have a shit load of black money and those with normal jobs don’t or..have a second job earning in black.
On the other hand, everyone profits: you call a plumber or electrician and chances are you won’t get an invoice: it is cheaper for both parties.
Didn’t they take precautions against this the last time they defaulted and the EU had to bail their ass ? Some people never learn …
Good to see nothing’s changed since the GFC.
So glad nothing has changed.
aw shit, here we go again…
There’s a reason why us Italians call Greeks cousins
If the government put more money into infrastructure instead of buying F16s maybe there could be a real change in attitude. The misuse of funds is a big factor in why the populace would rather just pocket the tax.
Greeks are struggling to make ends meet with absurd taxation, rent, utilities and gas and even more absurd wages, and some do it through untaxed money, and people criticise them for it as if they’re hiding private jets and take secret trips to the Caribbean with that money.
I guess Urusula would have to review her comments?
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Greeks spend €40 billion more than they declare as income, Bank of Greece governor Yannis Stournaras told the 19th annual Tax Forum of the American-Hellenic Chamber of Commerce Tuesday.
This difference reflects the size of the grey economy Stournaras said, adding that the latest data, from 2021 incomes and expenditures put that size at 20.9% of GDP. It is also a reliable gauge of tax evasion, although evasion and the gray economy are not one and the same, Stournaras remarked.
In the period 2015-21, this excess spending ranged from €36 billion to €49 billion, the central banker said.
Total declared income for 2021 was about €84 billion, of which 79% came from salaried workers, including merchant marine employees. These categories, who can’t hide their income, which is taxed at its source, pay disproportionately high taxes.
About 70% of taxpayers engaged in a form of business activity, or who are self-employed declare annual incomes less than €10,000. And 37% of individual taxpayers declare income of up to €5,000.
That the self-employed and very small enterprises disproportionately hide their incomes is not unique to Greece; it happens in almost every country, Stournaras said.
Of course, the very rich have their own ways to avoid paying taxes, through offshore companies and use of dummy invoices.
Tax avoidance extends to indirect taxes: in 2020, Greece was 4th among EU members in non-payments of Value Added Tax; the lag between expected VAT receipts and actual ones is estimated at 19.7% or about €3 billion. Still, Stournaras said, there has been progress on that front as a result of the pressure to adopt electronic payment methods.
What can be done to fight tax evasion? Stournaras had six proposals: expand electronic transactions to cover more economic activities; provide incentives for payments by credit or debit cards and through the banking system; offer tax breaks to those who reveal undeclared transactions, especially in sectors with proven high levels of tax evasion; continual upgrading of the Public Revenue Authority’s electronic transaction monitoring systems; provide a stable, and simplified, tax regime; and intensify efforts to create a culture of income accountability.
I ll give you some examples on how extreme is tax evasion in greece.
A plumber can come and do his work at a house for a couple of hours and he will charge you 100 euro without receipt and 125 with receipt. This person will declare at most 9k or 10k a year which is under the minimum wage. Doctors, electricians, lawyers, personal trainers etc do the same. They have FUCK YOU money and they dont get taxed.
So when you hear that the average salary in greece is like 1000 euro add at least 30 to 40%. Thats what it shows not what enters the pocket.
The only ones who cant tax evade are the public servants.
Recently measures were taken to reduce tax evasion and to be fair it is reduced but how the mindset will change is a mystery.
How does the size of the grey economy in Greece compare to other EU countries?
Oh it’s the same in Belgium. Those who are sel employed or have businesses have a shit load of black money and those with normal jobs don’t or..have a second job earning in black.
On the other hand, everyone profits: you call a plumber or electrician and chances are you won’t get an invoice: it is cheaper for both parties.
Didn’t they take precautions against this the last time they defaulted and the EU had to bail their ass ? Some people never learn …
Good to see nothing’s changed since the GFC.
So glad nothing has changed.
aw shit, here we go again…
There’s a reason why us Italians call Greeks cousins
If the government put more money into infrastructure instead of buying F16s maybe there could be a real change in attitude. The misuse of funds is a big factor in why the populace would rather just pocket the tax.
Greeks are struggling to make ends meet with absurd taxation, rent, utilities and gas and even more absurd wages, and some do it through untaxed money, and people criticise them for it as if they’re hiding private jets and take secret trips to the Caribbean with that money.
I guess Urusula would have to review her comments?