From five-star hotels to humble tavernas, Greek tax inspectors are fixing their attention on tax evasion at summer holiday hotspots.
The government served notice on Wednesday that Prime Minister Alexis Tsipras’s promised crackdown on tax evasion is now under way, a week after sweeping increases in value-added tax were imposed.
“We will start in the expensive destinations, the luxurious hotels and we will go even to the smallest taverna,” Deputy Finance Minister Trifon Alexiadis told reporters, outlining the government’s summer plans for cracking down on evasion.
Spot checks by the ministry’s financial crimes squad over the past weekend turned up tax violations by almost one in four businesses, he said.
Budget cuts have left the debt-stricken country’s financial crimes unit short-staffed, but extra inspectors will be drafted in from other departments to help with the audit push, Alexiadis said. Offices that handle public enquiries will also be closed periodically so staff can concentrate on anti-evasion work.
Under the terms of Greece’s third bailout programme, VAT rates have been raised on Aegean island hotels and restaurants, drawing complaints from tourism industry bosses who said the measure would hit revenue during the peak season.
Tourism accounts for about a fifth of Greek gross domestic product, making it a much-needed motor of growth and tax revenue for the ailing economy.
In a recent report on Greece, the International Monetary Fund said that while debt collection was improving, tax evasion remained rampant among the rich and the self-employed.
The Paris-based Organization for Economic Ccoperation and Development has said Greece must make tax collection more efficient, improve audits and speed up court proceedings to strengthen enforcement.