With antiquated record keeping, court cases backed up a decade, and tax cheats still running rampant during a crushing economic crisis, Greece is planning to use the same kind of cross-referencing and collection techniques that make the American Internal Revenue Service (IRS) the most efficient – and feared – in the world, although it’s now found itself tainted by scandal too for singling out right-wing groups for audits.
In the U.S., celebrities, politicians and the rich can all wind up in jail if they don’t pay their taxes. In Greece, almost no one goes to jail for not paying taxes, as the case of aging singer Tolis Voskopoulos showed.
In 2011, an Athens court gave only a suspended three-year prison sentence to Voskopoulos who was found to have evaded 5.5 million euros, some $7.07 million and fined him only $10,000. But in February this year, the country’s highest court waived the fines, effectively meaning there was no punishment for the celebrity and he didn’t have to pay back the government.
His wife was deputy culture minister Angela Gerekou, a former Playboy model who became a politician for the PASOK Socialist party. The arrest of her husband forced her to step down but she’s back as a Member of Parliament for the party.
Tax cheats owe more than $70 billion but the government has collected only a miniscule amount, and despite well-publicized arrests, there still hasn’t been a single major prosecution of a high-level figure, apart from former defense minister Akis Tsochatzopoulos who was sentenced to eight years for failing to report his wealth as part of a larger case in which he’s also being prosecuted for corruption and money-laundering and embezzlement from defense contracts.
The new checking system will apply to all taxpayers with an emphasis on those with high incomes and the self-employed so as to reveal any untaxed revenues, the Finance Ministry said.
Greek taxpayers are notorious for under-reporting or not reporting income, stashing cash in secret bank accounts in Switzerland and other tax havens, and doing whatever they can to avoid or evade paying taxes, one of the reasons for the country’s staggering $390 billion debt.
The government in 2010, with the economy heading for collapse, was forced to go to international lenders for a $152 billion bailout and now is receiving a second for $173 billion, but hasn’t met demands to improve the tax collection process.
The ministry plans to examine the records of 460,000 self-employed and small manufacturers who state annual incomes below the tax-free threshold, wealthy taxpayers with large amounts of property, taxpayers who have not explained the origin of money forwarded to banks abroad in the 2009-11 period, and those with high expenditure that is incompatible with personal and family incomes declared.
The government, however, still hasn’t checked a list of 2,062 Greeks with $1.95 billion in secret Swiss bank accounts although it’s had the names for almost three years amid criticism that people are being protected from scrutiny.