Greek Banks Join Fight to Find Tax Evaders

ATHENS – With Greece drowning in debt and most major tax evaders still on the loose – a $60 liability for the country – Bank of Greece Governor Giorgos Provopoulos has signed an act that will allow tax banks to cross-check large transactions with tax authority data as part of a government drive to crack down on large-scale tax cheats and burgeoning money-laundering as desperate Greeks try everything to avoid an avalanche of tax hikes.
The law involves so-called “high risk” clients, such as self-employed professionals with accounts of more than 200,000 euros ($263,000) last year and legal entities whose total deposits or cash withdrawals were more than 300,000 euros, or $394,000, in 2011. It’s normal for virtually every profession or business in Greece, including everyone from mechanics to doctors, lawyers, fruit and vegetable vendors and kiosk owners not to issue receipts so they can hide their true income.
Under pressure from the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) Troika, which is lending Greece $152 billion in rescue loans and arranging a second bailout of $172 billion, Greek has cut pay, raised taxes, slashed pensions and is going to fire 150,000 workers over the next three years, but has lagged on going after tax evaders.
More than 100 have been arrested in a recent crackdown, but, typical for Greece, no major tax cheats have been prosecuted and a lagging court system means it could be 10 years before they see the inside of a court room. Earlier this week, the manager of a private security firm based in Athens was charged with not paying a tax bill of $692,000 and the owner of a food retailer accused of not paying $623,000. Finance Minister Evangelos Venizelos has been negotiating with Swiss authorities for months, trying to get the names of people who have spirited money outside of the country, including politicians, without declaring it, as required by law.
The financial crimes squad known as SDOE has been chasing tax evaders, but tax inspectors, whose legions have been charged with massive corruption and with taking bribes in return for not prosecuting tax cheats, have tried to block the appointment of new investigators. The Finance Ministry is also planning changes to the law regarding real estate transactions to secure revenues from the property transaction tax and value-added tax to render accountable not just the buyer and the seller, but also banks, notaries and lawyers in case of tax evasion. The bill that is being prepared will provide for fines for anyone involved in property tax fraud, and for the electronic submission of property contracts from 2013, to allow for cross-checking. New contracts will have to include the signatures of all of the above parties, resulting in the full monitoring of mortgage loans as well.