GREECE BREAKING: One third of Greek deficit lost to tax evaders, Greek elites earn twice as much as they claim

New research nails structural evasion as being endemic among the powerful

Tax cheats have robbed Greece of some 11.2 billion euros, say Greek and American researchers who used bank records to analyse the likely tax evasion level.

The method is precisely the one used by private   banks to determine the real income of loan seekers. Surprise, surprise, this is more accurate than looking at tax records, often themselves falsified in the first place. The study concluded that the true income of the average Greek is about 1.92 times larger than the tax declaration.
During the 2009 tax year, evaders failed to report a whopping €28 billion euros which, at a tax rate of 40%, represents nearly a third
But this is where it gets interesting: the top tax-evading occupations were doctors, lawyers, engineers….and Parliamentarians. The Greek
parliament recently rejected a bill that would have targeted tax evaders in this manner. Why ever might that have been?

The total evasion figure is seven times that of the Samaras shortfall of €4bn to qualify for the next bailout tranche. Should Greece be kicked out of the euro on that basis, the Greek elites will have nobody to blame but themselves. They won’t do that, of course: but the ordinary person being asked to pay for this mess will.

“Evasion simply shifts its methods once discovered,” said an Austrian tax lawyer I know. This was confirmed by one of the researchers involved in the Greek study, who told the media last week, “People would immediately change their banking practices” if the Troika insisted on cracking down on the evasion.

We must all grow up and face it: the Greek elites are incurably dishonest and corrupt.

Says an Athenian Slog contact:

“Even if you catch the bastards, they have friends high up, and bribes will be paid to stop the investigation going to trial”.

Earlier this year, authorities charged 200 people with tax evasion, but failed to obtain a single high-level prosecution. This month, a group of seven retired and active tax officers, four of whom were high-ranking administrators, were sentenced to 70 years in prison for embezzling 28 million euros, only to be released pending an appeal. Few Greek Sloggers think they will go down.

See also: The EU’s new idea in Spain – bank investment haircuts for the poor.

42 thoughts on “GREECE BREAKING: One third of Greek deficit lost to tax evaders, Greek elites earn twice as much as they claim

  1. If a 1.92 factor is correct and the Zerohedge article on comparative petrol (gas) prices and earnings has valid data then the average Greek would have higher earnings than the average Brit.

    So how much are the tax evaders in the the UK getting away with especially if today’s list of ’20 top known evaders’ is to believed with number 20 spot going to someone who owes £192 k (presume cumulatively as well)?

    I think this shows the UK Tax authorities have too many unknown and known unknowns.

    Am I just a old conspiracy geezer in believing that the UK is probably equal to Greece in matters of tax evasion?


  2. “Am I just a old conspiracy geezer in believing that the UK is probably equal to Greece in matters of tax evasion?”

    I have no special knowledge to back up this response but I’d be inclined more to the idea that the UK equals the best of any country at ‘avoidance’, but probably not at evasion.

    But I do have some experience of Accountants being perfectly happy to create a legal scheme to assist in avoidance providing it was profitable enough for them. Whilst also being enthusiastically ‘anti’ avoidance if one designed the circumstances oneself, which would therefore leave them out of pocket.


  3. Pingback: John Ward – Greece Breaking : One Third Of Greek Deficit Lost To Tax Evaders, Greek Elites Earn Twice As Much As They Claim – 16 August 2012 | Lucas 2012 Infos

  4. I’ve lived in Greece, London, New York, California, and others… in my experience the “elites” of EVERY country on earth are doing the same in their own country’s… the same way everyone is hiding their true debts. For crying out loud,when a man running for President of the Unites States refuses in the midst of a campaign to give his financial info to verify his tax history… and he STILL has a chance to win? That having been said I think this is the most concise well researched piece about Greek political corruption and Tax Evasion in Greece… as tax evasion is institutionalized it is the Government that is responsible for it’s continuation.


  5. This is happening at every level .From the greek papers two days ago : at 52.7% is set by the tax department the tax evasion rate in tourists places this summer ( the rest 47.3% paid the taxman under the counter and got the all clear ) I was in greece for two months this summer and in every single place i went i had to ask and insist for my receipts , i was refused , ignored and verbally abused and in lots of case i had to deal with petty answers like “oh come on , don’t ask for a receipts , the economy is so bad, you have to support us ” . Tourism was down 3% this year to the month of july and expected to get better as august is the best month every year .Last year was up by 10% despite the problems and the news .What they claim is no excuse .No one wants to pay taxes and there is no one to collect them as the tax department is corrupt from the top guys down to the last unimportant officer.Greece’s financial problems are a by product to the moral and cultural bankruptcy and this will take a long long time to fix .They can forgive our debts , it makes no difference, the country will not operate at any level . It needs much much more than that , and i can not see it happening any time soon .( i will dare to say , greece needs a “devil” the kind of Putin or Erdogan ). Next week meeting Merkel , Samaras is going to ask for an extension till 2016 , just right for his term to run and pass the job to the next person . I can see no hope in the horizon .


  6. Thank you for this post.

    OECD analysis has shown that 76% of greeks (middle class and down) account for 27% of total taxes, with most of this removed at source – ie PAYE.
    The corollary of this is that the 24% corporations and individuals provide 63% of the tax total. Or should I say, unpaid tax.

    Therefore, no matter how heavily you tax the 76% and strip their pensions to nothing, the money taken from the 76% majority will never EVER be able to produce even a quarter of the missing tax money of the 24%.

    Further figures calculated with corruption tables show that even if every hairdresser, plumber & taverna owner etc. dealing in the black was caught, the total of this black money would only yield – at best – another 4%.

    The OECD did not attempt to calculate the black money of the rich.

    Meanwhile our parliament (300 MPs) still receives 16 salaries of 8000€/month each – there has been no haircut – before enormous perks which double and even triple that amount effectively. In 2011 they cut their take from 18 salaries of the same with much soulful self-congratulation.


  7. Why this is of any concern to American IRS pirates is beyond me. After all, the Greeks are only sticking to tradition and wrongly or rightly, millions of Europeans use accountants in order to cheat the taxman.

    Oh and to put an end to their constant demonization, the Greeks should threaten to quit the EU and adopt the rouble.

    Now that would be fun to watch!


  8. Just to add… this taxation situation will not change within the system… as long as old guard politicians (Pasok/ND) are supported by EU leaders for re-election and the threat of Grexit keeps the pensioners (20-25% of population) running to the polls to keep the Eurofunds flowing… nothing will change. Granted living off of less that 200 euro’s a month pension is a bitch, and any threat to it’s sudden end are literally life threatening… but, this is at the cost of the future and must stop. If rich Greeks don’t want to pay taxes than they can leave… I am sure there are plenty of British realtors willing to help them find a great new place :)


  9. “Greece’s financial problems are a by product to the moral and cultural bankruptcy and this will take a long long time to fix .They can forgive our debts , it makes no difference, the country will not operate at any level .”



  10. Thank you for this post… as you can imagine getting the truth from Greek government sources about tax evasion is a lesson in futility.


  11. Philippines is very similar to Greece………those that want to pay usually manage to ‘negotiate’ a good discount and those that dont rarely get pursued. No one dare calculate the amount ‘lost’ in that place.
    It works there by some definitions simply because its always been a low tax low spend place……it could never be anything other under the current arrangement……
    Greece has become a problem because it has morphed into a high tax high spend country since taking on big debts before considering tax reform….


  12. “We must all grow up and face it: the Greek elites are incurably dishonest and corrupt”.

    Why pick on the Greeks? ALL nations elites are incurably dishonest and corrupt. And the lower classes are as well. It is just they have less to be dishonest about. Ever paid in cash to get your garden tidied up?

    Different nations have different disonesty methods, because enforcement differs between nations.
    But in the Western societies, the breakdown of the rule of law is going to lead to serious problems. When people realise that contracts will be broken, savings disappeared and pensions drastically reduced, the elites will be relying on martial law to control society (and keep their own ill-gotten gains).


  13. Maybe what he meant was “We must all grow up and face it: the Greek elites are simply to incurably dishonest and corrupt TO CONTINUE WORKING WITH.” cool… at this point the more people slander Greece and it’s efforts… hopefully the sooner we will be out of the Euro, and one quick regime change can at least give us a chance… the longer the EU supports the same crooked bastards that spent us into the poor house (and kept it from us) and now refuse to pay their taxes… the longer this will continue.


  14. Sorry folks,
    I dn’t usually break into a theme by saying “O/T” but this is wonderful news. Julian Assange has been granted asylum by the Ecuadorian government.
    This is in spite of the arm-twisting and threats from the USA and of course, our own corrupt government here in Britain.
    This is bad news for the bald-headed little room-sharing bully, Hague, who signalled that, despite International Conventions, the political police here could be ordered to invade the embassy and snatch Assange.
    Congratulations to Assange.
    Congratulations to Ecuador.
    Tough Shit, Billy Hague.


  15. Pingback: GREEK CRISIS: Why Antonis Samaras will not be going into battle unarmed next week. | A diary of deception and distortion

  16. But they’ll get him the minute he steps outside the Embassy to get into the airport car.
    The guy is accused of rape of an adult woman. Compare this case with the recent one where a gang of Muslims raped girls as young as 12. Are you as sickened as I am with the stinking hypocrisy? The uk government doesn’t even have the b***s to admit they’re being the USA’s enforcers.
    Realistically we’re talking extraordinary rendition here, a euphemism for abduction and imprisonment contrary to human rights.


  17. Because they are extremely good at it; brazen is an understatement. If the elites don’t fix this themselves, a new lot of elites will come along and do it, and the first lot will not find it pleasant. Neither will the non-elites.


  18. …and the people’s respect also.Nice to remember the fundamentals once in a while.Perhaps we can do that when we move to Mars.


  19. As a retired accountant, I can tell you that nothing pleases my former colleagues more than complex and clever tax avoidance schemes. Replete with profit, they offer the sort of intellectual challenge that doing the books usually cannot, though minimising the statutory presentation of information to the public in a PLC can provide fun, too. Not only those plus points, but also contact with the movers and shakers, always good for a diversion from the boring Drs and Crs of J Cleese.

    We are very good at tax avoidance in the UK, a fact that reflects our skills but even more the gruesome incompetence, lack of imagination and possible complicity of those who draft tax laws. We are very bad at writing laws with few loopholes, and lazy at stopping them up when they do occur. Well, it’s only in the interest of those who pay tax, what would tax advisers and members of the rich elite know about that?

    The answer lies with the legislature, which of course is busy lining its pockets as fast as it can, never sure that the next election will not bring back the opposition.


  20. Well then. The least sloggers can do is to have nothing to do with any sale of London real estate, yachts or other financial sink-holes to any rich Greek. Or to support these hypocritical leeches in any other way. Sorry.

    And to forward this piece to anyone with any influence thereto.

    PS paying your leaf sweeper in cash? Hardly the same thing, even if the principle is. And for all you know they declare it.


  21. @MaxC “The uk government doesn’t even have the b***s to admit they’re being the USA’s enforcers”

    One wonders what the quid pro quo was for this little episode……


  22. Lets face facts: most people are hypocritical when it comes to taxes. You read the constant refrain ‘the rich should pay higher taxes’, or the ‘elite don’t pay their taxes, and yet we never apply the same yardstick to ourselves.

    In Greece tax evasion is basically the norm. Where I go on holiday I would sit and have breakfast but the waiter would never bring a till receipt (because they have known me for 30 years), and on the rare occasions when he did so I would laugh and he would laugh as we both knew the tax officials were on the island !

    Taxes need to be simple and the rate set low. That’s the problem here in the UK where taxes are far too high and far too complex.


  23. @Ioannis,

    I’ve lived in the UK, Greece and California.

    The taxes Greeks pay as a percentage of their income is the highest of all and by quite a significant margin.
    I got a house in the UK for 100K and payed 2.2K in taxes, solicitors, etc.
    A 100K house in Greece would attract 20K+ in taxes.

    Tax Evasion in Greece is not as bad they portray it and it is usually linked to outlawed activities. E.g
    You cannot expect a Drug Dealer to declare all their income with receipts, would you ?
    Or a prostitute to itemize and declare her earnings ?

    So, with exception of hairdressers, plumbers (i.e. little fish) the majority pay all their taxes properly. Especially the new taxes (6x increase in property taxes, emergency “solidarity” tax, emergency car tax) are far disproportionate to their income.


  24. Pingback: John Ward – Greek Crisis : Why Antonis Samaras Will Not Be Going Into Batlle Unarmed Next Week – 16 August 2012 | Lucas 2012 Infos

  25. “Taxes need to be simple and the rate set low. That’s the problem here in the UK where taxes are far too high and far too complex.”

    Who can argue with this? Most people are reasonable given the chance.

    For example if you are currently on PAYE but dream of starting your own business which would require saving up to buy a capital asset, each pound you earned will only buy 30 pence of asset after Income tax, Nat Ins and Vat on the purchase. Why would you trouble?


  26. Andy: “Lets face facts: most people are hypocritical when it comes to taxes. You read the constant refrain ‘the rich should pay higher taxes’, or the ‘elite don’t pay their taxes, and yet we never apply the same yardstick to ourselves”

    What a ridiculous thing to say. Paying the DIY man in cash is not the same as millionaires avoiding tax, especially if those same millionaires are the law makers that are ordering the tax department to pursue small fish.


  27. @Jacob… oh, I know all about it… I live here in Greece and I can EASILY say that when you figure everything together the AVERAGE Greek is getting prison raped… it is far and away the most highly taxed place I have ever lived in or even heard of… I pay 23% sales tax… if that happened in other countries (US for example) the streets would be awash in blood… tax evasion here is as bad as they make it out to be because the “elites” pay less than the “elites” in other countries and they only care because they are jealous. :) This year I will have made an honest 5,000 euros… that is now enough to tax me on. Not exactly the sun drenched holiday life depicted by some peoples… as far as all the insane new taxes… my favorite is the “virtual” tax whereby the tax office just looks at your car, boat, house, land, or anything else you might have worth plundering and then (through no specific formula at all) will assign you a personal tax rate based on how much they think your really worth… so even though I made 5,000 Euro last year… but own property that I farm (non commercially) for food for my family, and a 300 year old, but big house… they will force me to sell land (at super rock bottom prices) simply to continue to exist or they will put me in jail… like they did down in Crete to some old man the other week. After not having paid their taxes… Greek political and business “elites” will snap up all the land for themselves at rock bottom prices… and then sell it to the Brits, or Germans, etc and it goes on and on and on…


  28. At Jacob , i am sorry to tell you that you have been misinformed as the taxes for buying property in greece are not as you stated .If you are a first time buyer the taxfree amount is 200.000-275.000 euro depending if you are single or married and for the properties after that the tax rate is 8% for the first 20.000 and 10% for the rest .
    If you take into account that greece has a “unique” system when it comes to property tax that the actual amount that you pay taxes on is officially half of the amount that you pay to the seller , known in greece as “objective” price ( this is what the government sets according to areas and sizes ) and the actual price which is officially paid .The story becomes more hilarious when the buyer takes a loan on the property and of course the bank gives out the loan on the actual price and in paper the loan can be easily double the amount of the official price .You can not beat the greeks when it comes to twists and bypasses and detours of the laws and the rules .
    As for the rest of the impressions you got about who pays and who doesn’t pay taxes , you sort reminded me of Asterix in Switzerland .When he return back to France from his trip there and was asked how was Switzerland , he moved his big arm across horizontally and declared : “flat” .


  29. @ Ioannis , you are right , when you get stupid and incompetent politicians that run the country to the ground , now they grab what ever they can and from the ones they can put their hands on , the small people in other words while the elite stay untouched and safe as always . They are so stupid that can not even bother to adopt a tax system from an other country if it has been successful , they have each of them every time new ideas with same stupid results .Greece needs a modern Kanaris to set a “bourloto” to the parliament and get rid of all of them once and for all .


  30. @Yana… why would they bother to adopt a tax system from another country when the one we have is working out so well… for them.


  31. The UK tax system is child’s play compared to the 78,000 pages of the US system, whose very own former Comptroller General, David Walker, once complained it was so complex he himself had to employ an accountant because he couldn’t understand it.


  32. There is no link to the article or any suggestion of the methodology used. There is so much garbage research out there that this needs to be included to be credible in any way.


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