Greek tax inspectors face tough crowds

28/08/2013

The government is moving more aggressively against tax evaders as it attempts to climb out of debt.

By Andy Dabilis for Southeast European Times in Athens -- 28/08/13

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The Greek government is encouraging customers to ask for tax receipts and for businesses to issue them. [AFP]

Restaurant and tavern owners and customers are increasingly harassing tax inspectors at a time when Greece has intensified a long-overdue crackdown on tax evasion, but officials are determined to enforce the tax laws.

Residents in a village in Peloponnese barred Financial Crimes Squad inspectors from leaving an establishment after they issued a citation from an audit this month. Similarly, in a village in Crete, tax inspectors faced a near-violent crowd that forced the team to leave before they could issue a one-month closure order against a tavern.

A nightclub in the city of Chalkidiki continued operating despite inspectors ordering it shut for tax evasion and arresting the owner for failure to comply.

"That is the mentality in Greece, nobody respects the laws. If you try to make them pay, they get angry," Andreas Kanakareas, 53, a video store manager, told SETimes.

Many businesses do not issue receipts, which prompted the government's drive to enforce the tax laws to bring in critically-needed revenues.

The government passed a law stipulating customers do not have to pay for goods or services if they do not receive a receipt, but the law has been ignored by many. Citizen resistance began last year on the island of Hydra, where riot police from the mainland were called in to rescue tax agents for citing a restaurant owner.

However, no charges have been brought against anyone interfering with the agents.

"No matter the reactions, they have to do the audits and the government is doing its best to achieve results," Antonis Klapsis, head of research for the Konstandinos Karamanlis Institute for Democracy in Athens, told SETimes.

The squeeze is targeted at restaurants, taverns and nightclubs -- especially on islands notorious for runaway tax evasion -- during a record-breaking tourist season. Authorities found out during two-week inspections this month that nearly half of the 586 places it checked were in violation of tax laws.

There are signs the days of leniency are over. Tax agents closed a restaurant on the island of Chios for two days at the height of the tourist season and issued a 5,000-euro fine against the owner.

Prime Minister Antonis Samaras stepped up enforcement because he persuaded the country's international lenders to decrease the VAT on eateries from 23 percent to 13 percent until 2014 to boost tourism.

But Samaras warned the VAT will increase again if establishments do not pass the savings on to the customers and if they keep taxes from the state.

"We are engaged in an unprecedented campaign, closing down businesses and legislating. You cannot win the fight against tax evasion without carrying out checks," Finance Minister Yannis Stournaras told Mega TV.

Stournaras criticised those business owners who pocketed the sales tax levied on transactions.

"If this is Greek society's system of values, then I am sorry but penalties must be imposed. We must all demand receipts," he said.

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The top tourist destinations of Mykonos, Santorini and Crete had tax avoidance rates of more than 56 percent, and authorities ordered 12 establishments closed for a month and additional 14 shut down.

The ideology in Greece for a long time has been it is not so bad if one steals from the state, according to Alex Sakellariou, a sociologist at Panteion University in Athens.

"The state itself never actually wanted to cultivate a tax consciousness among the citizens because it was the state that promoted these client relations with the people, and it is extremely difficult to confront them now," Sakellariou told SETimes.

How should the government protect the safety of tax inspectors? Make your opinions known in the space below.

This content was commissioned for SETimes.com.
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