Online systems cut VAT gap
Card use, interconnection of tills with POS and e-bookkeeping have reduced tax evasion
The increase in electronic transactions has reduced the value-added tax gap, with the state collecting significant revenues on an annual basis.
The skyrocketing use of cards during the pandemic, which has now become customary for a very large segment of the population, the introduction of electronic books and the connection of tills with POS have reduced VAT losses, so that the evasion rate has declined by 50% from 2017. The government is reaping the fruit of the changes it has introduced and expects the gap between the actual economic activity’s VAT and the state takings to be reduced further by 2026.
Therefore, from the 6 billion euros of VAT loss incurred in 2017, the state missed out on just €3.2 billion in 2021, while the latest study by the European Commission, slated for release in end-September, will, according to sources, show that the VAT gap for 2022 dropped below €3 billion.
National Economy and Finance Ministry officials argue that the VAT gap will shrink further, as from January 2025 the VAT declarations will be locked both on expenses and on revenue. They also estimate that VAT losses will be contained to 9% by 2026, leading to additional revenue of €2 billion, which could fund new tax breaks for households and enterprises, such as the reduction of VAT rates or the further slashing of social security contributions.
In 2019 Greece was a laggard in the European Union, alongside Romania and Malta, with the highest VAT losses. The situation began to change in 2020, with Greece rising from the bottom of the table to the top in VAT evasion reduction, alongside Germany, Hungary and the Netherlands.
The “locking” of the VAT declarations is important, because will eliminate the option for businesses and the self-employed had to amend their data, so that whatever amount appears on their electronic books will be automatically transferred to the VAT declaration. Nobody will be able to increase their declared expenses, but only their stated revenue, which would entail additional VAT dues.
