Tax evasion in Greece exceeds 60 billion euros annually, governor of the Bank of Greece, Yannis Stournaras, said on Monday. €
In interview with news website in.gr, the central banker said incomes officially declared in the country totaled 80 billion euros, while consumption totaled 140 billion euros.
He noted that this consumption was not accompanied by a decline in savings. On the contrary, savings continued rising the country. “We are considered European champions,” despite progress made in raising tax revenue as a percentage of GDP, Stournaras said.
Commenting on non-performing loans, he revealed that a legislative initiative was ready to be sent to the next Finance ministry after the June 25 elections to implement a common code of ethics for funds servicing NPLs. On asset auctions, Stournaras said politics should protect vulnerable borrowers, while commenting on a high interest rate spread between deposits and loans, the central banker said that in order to reduce this spread Greece must improve competition in the banking system, helping smaller banks and asking the government to offer equal competition terms.
Stournaras expressed his confidence that the country will regain the investment grade this year and reiterated that Greece needed a government with a long-term horizon.
PS I see a .progress” here. Tax evasion was over 110-120 billion euros annually when Greece signed the first bailout agreement.
I am not sure that Stournaras was aware of the implications of his tax evasion comment. If there were indeed 60 BEUR of tax evasion, that would mean that under 100% tax compliance, Greece would have a budget surplus of about 60 BEUR. It could repay its entire debt within 6 years. Or put differently, those lending to the Greek state are funding the private wealth of Greeks.
So true. It would be interesting to see where the corruption lies, my guess is with the higher ups. I have a vague recollection of a Siemens story years ago.
It isn’t a €60 billion deficit in tax revenue. It is a €60 billion deficit in declared income. I am guessing that the average overall income tax rate is around 30 % or less so that would be up to €18 billion deficit in tax revenue. The debt is currently a bit over €400 billion so it would take over 20 years to repay with 100% compliance. Your last sentence is still correct but the timescale is significantly longer.
If it wished the government could encourage better competition between banks by issuing its own investment products directly to ordinary people. For example Chania Bank is currently offering 0.8 % on a 1 year term deposit of up to €25,000. At the same time they are charging 11% plus on a mortgage. I have just put €10,000 in a 1 year term deposit in the UK issued by the government at 4%. At the same time you can get a mortgage from a bank in the UK fixed for 5 years at around 6.5 %.
We have a small Greek business and nowadays all clients pay with a bank transfer or by POS. Very litttle cash payments. We also ask invoices for all our expences, it makes no sence not to have an invoice.
More tax revenue but not lower taxes…. VAT is still an extreme 24%.
Unfortunately banks charge 1% on the POS, high costs in between bank transfers.
In the Netherlands a morgage goes for less then 5%. Banking costs are too high. We really consider to close our business as taxation is too high; no exemption for small income. Without tax evation, you can’t survive here.
“Without tax evation, you can’t survive here.”
Don’t fret, the Social Credit System/Universal Basic Income system is being “trialed” across (at least) Europe.
Remember, You will “Own Nothing and Be Happy” (World Economic Forum). 🙁
It’s a very sicko world if we let this happen.
Thanks for the clarification on ‘declared income’ versus forgone tax revenue. I agree with your conclusions. Still, even if it were ‘only’ 18 BEUR, that would result in a budget surplus of 18 BEUR, or 78 BEUR in revenues over 60 BEUR in expenses, or plus 30%! No other country in the world would have such a budget surplus! Not even close!