The crisis which brought Greece to the brink of bankruptcy in 2009 and onwards was in part due to the inability of successive governments to take in enough tax to cover their costs. More recently, at the end of 2023, the population’s total outstanding debt to the public purse was estimated to be €80 billion, or 20 per cent of the national debt (the latter, at around €400 billion or 162% of GDP for the same year, being the 4th highest in the world in percentage terms). But this was only the figure for established debts, many of which will have been for unpaid income tax. Equally, if not more important, is the potential tax due on undeclared incomes.

Greece is not a rich country: the average nominal gross income is €16,752 (Wikipedia, 2^nd quarter of 2023), a figure which is about 68 per cent of the EU average and includes some pensioners on incomes of €400-€600 a month. On the other hand some professionals are thought to routinely declare incomes which are a tenth or less of their real incomes, while 70 per cent of the earning population declare incomes less than €10,000. Clearly there is a substantial persisting level of undeclared and untaxed income. 

For this reason the Mitsotakis government has been introducing ever more draconian measures to force people to report their real incomes – measures which would be considered repressive in other countries where citizens are sufficiently trusted (or perhaps sufficiently intimidated by the possible penalties) to report their incomes correctly and pay the required tax. 

Measures to improve income reporting
One such measure, introduced earlier this year, is the presumptive income applied to the self-employed, who are presumed to be earning no less than the minimum wage (equivalent to just under €10,000 annually) and are taxed accordingly. Taxpayers can dispute the presumption but will then be subject to a tax audit.

Another is the linking of electronic cash registers to the tax network to ensure that the correct amount of tax and VAT is being paid, and more recently the requirement for almost all businesses to have a POS terminal enabling them to accept card payments. Similarly all chargeable business expenses have to be logged on the government’s MyData system, otherwise they cannot be claimed against income.

A major part of this effort has been the government’s drive to encourage the use of card payments for most transactions, not an easy task in a country where cash has traditionally been the preferred form of payment – even being used for some property transfers where the buyer and/or seller wish to conceal the real value of the property changing hands from the taxman. On April 1^st of this year, many hitherto exempt businesses were obliged to acquire POS terminals, including market traders, kafeneions and taxi drivers – a requirement made much easier by the existence of portable POS terminals with mobile data communication. Other measures include the making of cash transactions for purchases over €500 illegal, and requiring taxpayers to have spent a percentage of their income through ‘electronic’ transactions – either by card or bank transfer – in order to qualify for a basic tax-free band.

Checks on potential tax evaders
Checks by the independent revenue board AADE continue to reveal massive levels of tax evasion by businesses, especially in the catering and hospitality industry. In June it was reported that AADE planned to conduct 42,000 inspections of businesses in the tourist sector this summer, focussing on the main island destinations of the Aegean – Mykonos, Santorini, Paros, Rhodes, Corfu and Crete, etc – as well as mainland destinations in the Peloponnese, Halkidiki and Evia. Businesses found to be engaging in tax evasion face closures of 2 to 10 days. More seriously, businesses found to have offered violence to the inspectors face fines of up to €50,000 euros if the inspector’s life is deemed to have been in danger, and closures of up to 3 years (www.businessnews.gr). In one recently reported case, a firm of accountants was fined €2.2 million, having been considered to have facilitated tax evasion by one of its business clients.

AADE now has the authority to trawl through bank accounts, cross-checking declared income against expenditure and investigating apparent discrepancies. The government’s Appodixi app enables consumers to scan the QR code on receipts issued by businesses to check that they are genuine and correspond with the amount declared for the transaction to the tax authorities. If they find a mismatch, they have the option of reporting the fact and may receive a cash reward for doing so.

Which brings us to the subject of taxis – an industry where until recently cash was king. While we have no evidence that tax evasion is any more prevalent amongst taxi drivers and companies than in other businesses, the fact that most taxi fares are paid in cash clearly makes such evasion easier. The government is therefore expending some effort to ensure compliance and, as is often the case, enlisting the aid of the consumer to do so.

Card payments for taxis
As reported by Haniotika Nea on 1st August, taxi owners must now display a special sign informing customers that they are obliged to accept payments by card. This requirement, and the form of the sign, were specified in a ministerial decision by the deputy minister for the Economy and Finance Christos Dimas, following a proposal by the director of AADE Giorgos Pitsilis.

The sign takes the form of a sticker placed on the window of the right hand rear door of the vehicle, reading in Greek and in English:

The driver is obliged:
– to issue a receipt at the end of the route.
– to accept payment by card.
The customer is NOT obliged:
– to pay in cash.
– to pay before receiving the legal receipt.

The sticker is being produced by AADE with funds from its own budget and is available from the Panhellenic Taxi Confederation (POEIATA) so that the organisation can supervise the implementation of the decision. Taxi drivers are obliged to have installed the sticker on their vehicle within three weeks of receiving it from the Taxi Confederation or face a possible fine of €1000.

As with all such initiatives, implementation may turn out to be the problem. On a recent taxi journey from Kolymbari to Chania, asking to pay by debit card, we found that the only way to do so was in the taxi company’s office before departure. Moreover a faulty internet line resulted in our being charged three times for the same journey – though to do it justice the company promptly refunded the difference in cash once this was pointed out to them.

Success of the Appodixi app
Haniotika Nea also reports that further development of the Appodixi app has been held up pending resolution of privacy concerns, but that from September the government is proposing to increase the maximum bonus for reporting fake transactions to €3,000. To date AADE has received 174,924 reports from the app, of which 79,944 are signed and 94,980 anonymous.