Greece has traditionally been among the countries with the highest levels of tax evasion in Europe. Consecutive governments took no substantial measures to curb it but instead expanded tax exemptions and, most importantly, even in difficult times for state coffers, granted businesses and professionals forgiveness by writing off or restructuring overdue debts.
Almost all troubled businesses and professionals made use of these favorable arrangements, closing their books for a relatively low amount, with the tax authorities having no right to audit the years that were closed.
European Commission data show that from 2009 to 2024, €81.02 billion were lost in value-added tax, potential revenue that the Greek state could have collected. What does this amount represent today? It is equivalent to the non-payment of any tax to the tax office for an entire year, whether VAT, income tax, fees, excise duties, payroll taxes, and so on. Alternatively, for the next 37 years, no property owner would need to pay the Single Property Tax (ENFIA).
Greece now boasts the largest annual reduction in VAT revenue losses in the European Union, along with a significant increase in revenues.
Electronic books, the interconnection of cash registers with POS systems, the expansion of POS to all economic activity, as well as changes in the structure of tax audit and collection mechanisms, are – for the first time – bringing in revenue through the reduction of tax evasion.
During the bailout years, Greece would calculate a significant amount of revenue from the reduction of tax evasion in each of its reports. Every year, however, creditors simply deleted the relevant paragraph, as no one believed it had any real basis.
Greece had to wait until 2024 for the government to achieve a reduction in tax evasion amounting to €1.7 billion, while this year revenues of €2.2 billion have been calculated and are very likely to exceed €2.5 billion. In other words, within two years, revenues from reduced tax evasion will reach €4.2 billion, at a time when other European countries are following the opposite course.
According to the data, Greece’s VAT gap in 2023 was reduced to 11.4%, while for 2024 it is estimated at 9%.