A step in the right direction
The government announced new tax measures for the self-employed on Tuesday with the aim of cracking down on tax evasion, which is estimated to exceed 10 billion euros per year. However, any salaried employee who reads the new measures will realize, again, that the self-employed remain, even after these announcements, the favorites of every centrist government, which sees them as potential voters.
As is well known, in recent years 70% of the approximately 450,000 self-employed have declared an annual income of less than 10,000 euros – roughly the same as a salaried employee receiving the minimum wage. The government has finally decided that this flagrant tax evasion and gross injustice to the salaried employees – who, it should be noted, pay the biggest part of the tax revenue – must end.
But instead of finding ways to pressure tax-dodging entrepreneurs – with continuous audits of their wealth declarations, calculating their actual living expenses based on their standard of living etc – to declare their real incomes, it announced that no self-employed person will be able to declare an income below 10,920 euros anymore!
Obviously, any self-employed person who was showing an income of 5,000 euros a year and now has to declare 10,920, will pay 500 euros more in tax a year. It is certainly one step in the right direction. But there is no way that tax authorities will be able to crack down on the billions of euros that the majority of professionals deprive the state coffers of. In fact, even for this minimal obligation that it decided to impose on the self-employed the government also announced another measure to sugarcoat it: It will reduce the self-employed contribution (about 650 euros per year today) to those who declare 5% above the limit of 10,920 euros!
We should remember that the self-employed cheat tax authorities in two ways: They hide their real incomes and withhold part of the VAT they collect from the citizens without paying it to the state. It is estimated that this costs close to 3 billion euros per year to the state – one of the largest proportionally among EU countries.
We should also remember that it took Greece more than 10 years to connect cash registers and POS machines with the Ministry of Finance – and it still has not completed the task. What a success. We are still very far from reaching the rest of Europe.
