Unable to slow tax cheating or enforce requirements that Point of Service (POS) machines be used when making transactions, Greece’s New Democracy government will require citizens to use electronic means to spend nearly a third of their income so it can be tracked.
They will face fines otherwise, said the British newspaper The Telegraph in a report on the scheme the government said would bring in about 500 million euros ($553.81 million) in lost income with most Greeks still using cash to hide what they spend or bring in.
Alex Patelis, the chief economic advisor for Prime Minister Kyriakos Mitsotakis told the newspaper that Greece has perhaps the biggest shadow economy in the world with Greeks using every means they can find to evade paying taxes, especially the rich who hide their money in secret foreign bank accounts.
If Greek citizens do not spend 30% of their income using debit cards, credit cards, bank transfers, or on online transactions, they will be hit with a 22% fine on the shortfall, according to the Telegraph.
Last year, a documentary that labeled tax evasion a “national sport” in Greece attempted to explain the mentality of the country’s taxpayers although successive governments have quickly abandoned alleged crackdowns on voters.
The Institute for Applied Economic Research found that Greece’s shadow economy accounted for almost a quarter of the country’s overall economy and that many workers in private companies are paid in cash instead of checks and that use of the Internet to make purchases hasn’t been utilized significantly.
Mitsotakis took office in July 7 snap elections, ousting the former Ruling Radical Left SYRIZA that buried Greeks with an avalanche of tax hikes on the demand of the country’s European creditors and he said the 28 percent corporate rate would be cut to 24 percent.
He also promised to cut the rate of tax on the lowest tax bracket, from 22% to 9%, and to give out an annual bonus to pensioners at the end of the year as was done by SYRIZA in a frantic bid to regain voter support.
Read more at thenationalherald.com
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