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Greece’s Anti-Corruption Minister: 3.5K cases of tax evasion totaling €7bm

Yup. Greece has a Minister assigned to combat corruption. Since January 27th 2015. His name is Panagiotis Nikoloudis, former prosecutor for cases of money laundering. In Greek coalition government Nikoloudis has the duty not only to find out cases of corruption but also to collect the fines and penalties from tax dodgers. Three days ago, he was been also assigned by Prime Minister Alexis Tsipras to be in control of Financial Crime Units (SDOE).

In his first speech in the Greek parliament today, short before the vote of confidence at midnight, Nikoloudis revealed that

“3,500 case of tax evasion totaling €7 billion remain unaudited in the drawers” and that Finance Ministry “could immediately collect €2.5 billion in fines and penalties.”

He stressed that he has already given orders to collectors to proceed. He criticized the control mechanism saying that “the state does not have the possibilities to collect this money, for the simple reason that in SDOE and tax offices, controllers are not capable to meet their duties.”

With reference to his own investigations, Nikoloudis said further that

“one handful of families think that the state exists to serve their interests, they earn huge amounts from commissions, funds and European or Greek programs.”

He criticized that the “Finance Ministers after 1974 failed to establish control mechanisms to combat tax evasion” and he wondered “how the economic crisis did not occur earlier due to the high tax evasion.”

Before 2012,  “it was the citizens who went to the tax office and paid , not the other way around,” he noted.

He announced a legislation so that the SDOE will be able to confirm the tax clearance.

He revealed that the SDOE did the controls but that it was up to the tax offices to confirm the tax clearance with the effect that “tax evaders went missing in the procedure.”

He also mentioned that tax evasion from illegal tobacco trading is €1 billion per year.

Panagiotis Nikoloudis announced measures to tackle corruption and said that

“all public contracts will be investigated, and criminal charges will be raise, where necessary, while overpriced contracts will proceed further..

Measures announced to tackle corruption. As announced, we will check all public contracts will be awarded and criminal liability, where applicable, while overpriced contracts, he said, will not proceed. The same will apply for public contracts with forged papers.”

Who are the perpetrators for corruption? Nikoloudis gave an answer based on his experience from the Money Laundering Authority. An answer that broke a taboo in the system of intermingling and corruption:

“All these financial scandals that involved banks, funds have been committed by a handful of people – families, we call ‘state-subsidized capitalism‘. All these believe that the state is built for their interests. Unfortunately,  the state was responsive to this…”

He stressed, “We will investigate this regime and we will stop it,” adding that from now on, there will be no public contracts or commissions that will allow kickbacks.”

Anti-Corruption Minister Nikoloudis started his speech with the sentence: “Corruption seriously harms Democracy.”

Tax evasion by businessmen and self-employed has been one of the notorious problems in Greece, while employees and pensioners always had their taxes automatically deducted before they received their salary or pension.

Employees and pensioners have been the easy target by the Troika-imposed tax collection mechanism in the years of loan agreement and bailout program, with over-taxation, several poll taxes and heavy taxation to low incomes draining thousands of households. At the same time,  the big fish continued to swim around, even if some of them were temporarily arrested and then mostly set free on bailout.

Combating big scale tax evasion and tackling corruption in a country that has been ruled for years by petty interests, nepotism, cronyism and intermingling is a really difficult task.

PS  Why the crisis did not occur earlier? Oh, maybe Greece kept borrowing money as if there was no tomorrow? Just saying…


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