Greeks Turning in Droves to Credit, Debit Cards

(Photo: Eurokinissi/ Giorgos Kontarinis)

ATHENS – Shunning cash and being stifled by capital controls in place for nearly 2 ½ years, Greeks have turned to using debit and credit cards to make payments and purchases, the intention the government to reduce tax evasion.

Payments by credit and debit cards were expected to show a jump of more than 40 percent in 2017 over the previous year when the trend toward card use began to spike.

Bank estimates said the card use could go as high as 23 billion euros ($27.06 billion) by the end of the year compared to 15.5 billion euros ($18.24 billion) in 2016 – which itself had more than doubled from 2015 when the ruling Radical Left SYRIZA came to power.

Prime Minister Alexis Tsipras, reneging on anti-austerity campaign promises, agreed to a third bailout from international creditors, this one for 86 billion euros ($101.18 billion), closed the banks for three weeks and then put on the capital controls that has limited how much money people can withdraw in cash.

The 2017 estimate is only for payments made using cards issued by Greek banks and doesn’t include millions of tourists, which otherwise would show the use was some 27 billion euros ($31.77 billion).

Greeks have long preferred using cash so they can evade taxes, such a rampant phenomenon in the country that it’s almost a sport but one of the reasons the country has been in a crushing economic crisis for more than 7 ½ years.

A long-delayed Greek lottery that will give 1000 winners prizes of 1000 euros ($1193), aimed at cutting down tax evasion, has spurred soaring use of credit and debit cards in the country.

The draw was made on Nov. 30 but involved the use of cards only for October instead of the first 10 months of the year as originally intended and was done to encourage greater use of cards instead of cash, which has led to massive tax cheating for generations, particularly among the rich, many of whom hide their money in secret foreign bank accounts.

According to data from the Independent Authority for Public Revenue, the 8 million transactions that entered the draw exceeded 2.1 billion euros ($2.5 billion,), concerning some 4.5 million taxpayers.

IAPR head Giorgos Pitsilis cash cash prizes will be credited to the winners’ bank accounts after they have informed the authority of their IBAN numbers via its website (www.aade.gr).

Another set of 1,000 tax registration numbers (AFMs) were also drawn as backup in case any of the first 1,000 winners fail to claim their prizes. The taxpayers whose AFMs were drawn will need to register their IBAN number within three months of the draw or lose their winnings.

The tax authority is also planning a big end-of-year draw based on receipts from transactions in the first nine months of the year and in November.  Some 10,000 winners will be drawn for 1000 euros each winnings, which are tax-free.