Study: 4 out of 10 Greek small-to-micro enterprises to turn to ‘grey economy’

Four out of 10 small-to-micro businesses in Greece are expected to transfer their commercial activities to the so-called “grey” or “underground economy” during the coming period due to a consolidation of increasingly high taxes of all shapes and forms, such as advance payment of income taxes, VAT rates, special surcharges and a 29-percent tax on profits.

The data emanates from a study commissioned by the Hellenic Confederation of Professionals, Craftsmen & Merchants (GSEVEE), one of the oldest trade groups in the country, and published this week.

Just as ominously, the study projects that roughly 13,000 small-to-micro businesses in the recession-bedeviled country will terminate their activity in the second half of the year, with another 21,000 jobs threatened from such a development. The situation, according to GSEVEE, is particularly acute for family-run businesses and one-person-managed shops.

A “tax tsunami” imposed by the current leftist-rightist coalition government in 2016, in a bid to fulfill fiscal targets enshrined in the third bailout memorandum signed in 2015, has more-or-less worsened economic climate for Greece’s shopkeepers and SME operators.

Besides higher direct and indirect taxes, an accumulation of debts – to the tax bureau, social security funds, bank lending etc – along with an inability to tap into new markets in order to offset still anemic consumer consumption are cited as the reasons for the negative situation.

The largest bloc of small-to-micro enterprises with arrears is plagued with debts to the former self-employed professionals’ pension fund, OAEE, to the tune of 26.2 percent businesses’ surveyed.

SMEs that cited arrears to the tax bureau rose to 23.8 percent of the total surveyed, despite successive installment plans.

GSEVEE however cites the first “signs” of improvement in the overall economic indices for the sector and a return to normalcy after eight years of recession.