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Greece to combat tax evasion with “Midnight raids German style”

Greece’s tax authorities prepare “raids German style” in the middle of the night in order to localize ‘black money’ and ‘undeclared assets’. The tax inspectors will knock on doors or ring the bells at companies or freelancers’ business addresses even in the middle of the night and conduct controls. The inspections will take place without previous notice. “Surprise effect” so to say. Even without a prior court order.

“It is a system being used in Germany,” Alternate Finacce Minister Tryfon Alexiadis said during his speech in the Parliament stressing the success of German authorities in combating the big scale tax evasion. “This practice revealed major scandals in Germany,” Alexiadis said adding that “big companies will be targeted,  not only small- and middle-enterprises.”

The tax raids are planned in the context of an overhaul of tax authorities operation system aiming to combat tax evasion and give “Caesar what belongs to Caesar”.

The raids by the tax authorities will be conducted outside the working hours and tax inspectors will visit the offices of companies and also of freelancers even if the the latter’s business is home based. And here is a big legal obstacle: because home is protected and such a raid would need a court order.

Anyway, the inspectors will look for discrepancies between declared income and revenues, would seize tax information when needed, they may be able even to look for cash and seize it. They will be authorized to seize assets and depposits for debts to the state.

Tax authorities can seize assets and deposits already, the new feature are the “raids without previous notice and court order.”

In the effort to combat tax evasion and intensify controls on the spot, Alexiadis plans to scrap the practice of citizens running every once in a while to the tax office. As from 2016, interactions with the tax office will be made electronically, in exception case the taxpayer will meet the tax official after telephone appointment.

This practice will enable the Finance Ministry to send some 6,000 tax officers to the streets.

Another measure to be taken is the expanded use of “plastic money” something that went already in effect with the imposition of “capital controls.” Alexiadis plans to give incentives (lottery, tax-break bonus) for those using cards and do not pay in cash for transactions of purchase of products and services. The Alternate FinMin plans also to convince the banks to decrease their commission for payments with cards.

He also announced changes in the controls by the Financial Crime Units (SDOE) and that big cases of suspected tax evasion – like the Lagarde-List- will not be written-off due to time limitations.

Lagarde list controls: He revealed that since the beginning of 2015 (under SYRIZA government) 80 cases have been investigated while 38 have been concluded. In 2014, 143 cases were investigated and 95 concluded. Without change in the legislation the Lagarde-List ‘crimes’ will be written-off due to time limits by end of December.

Proto Thema comments that “All this suggests that Alexiadis raises the expectations in the changes he plans and puts on his targets politicians, media and government suppliers in order to show where the new SDOE will focus after October.”

Will Greece finally manage to take tax evasion under control? If I were member of the Financial Ministry team I would propose also a campaign to raise awareness about the side effects of tax evasion. A campaign to run parallel to the night raids and tax officers on the streets.

How many people/consumers do we know, who are honest in declaring their income and pay their taxes, but they avoid to ask for a receipt targeting a V.A.T.-free discount or buy their cigarettes from the black market?

On the other hand, we live in times of deep economic crisis with an ‘unfair taxation’ system, with more than one  million of long-time jobless and more than 3 million uninsured. Would you blame them for seeking the discounts resulting from the absence of receipt issuing when they visit the doctor, they call the plumber or they buy products to cover basic needs?

PS difficult times, difficult questions. And more difficult answers.

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  1. These raids are similar to the powers the customs and excise officers have in the UK. As an ex-police officer I know that their powers of entry to premises by force are far greater than the Police possess even with court orders.
    What I find amusing is the idea of a Greek Tax inspector getting off his/her bottom from behind his/her desk, putting their cigarette out, leaving their Frappe on the desk then crashing through somebodies door at 2am in the morning. Sorry.

  2. The government that sanctions this kind of criminality is & haS in fact – ENGAGED CRIMINALS TO ILLEGALLY STEAL FOR THEM – FROM THE POPULATION AT THEIR DESCRESSION & WHIM.