ATHENS – With the new New Democracy government thinking of incentives, more Greeks are using debit and credit cards instead of cash, which has long been the preferred way to pay and as a method to evade paying taxes, which remains a rampant problem.
Use of credit and debit cards in Greece rose 12.8 percent in the second quarter of 2019, but the average value of each transaction declined, according to data published by the Hellenic Bank Association, seen as an indicator that more people are using them pay even small bills.
People use use the cards can get tax breaks and rewards based on tracking their usage although purchases abroad or tourists in Greece aren’t included in the data.
New Democracy government is reportedly going to try raising the online limit transaction level to offer even more tax breaks for using the cards and to rein in tax evasion.
The scheme would give salaried workers, pensioners and farmers a tax discount of 2,100 euros ($2355.26) instead of 1,900 euros ($2130.95) if they do business online with cards, said Kathimerini.
The ministry is also planning to include in the bill to be tabled in Parliament the reduction of the ceiling in the use of cash for financial transactions concerning the purchase of goods or services, lowering the limit from 500 euros ($560.77) to as low as 200 euros ($224.31,) sources who weren’t identified told the paper.
The bill will further incorporate the suspension of the capital gains tax on properties for three years and its review in the fourth year, the suspension for three years of the value-added tax on construction activity and the gradual introduction of compulsory online invoices among businesses, among other measures.
That comes after a myriad of other ideas to cut down the use of cash failed. In March, when the Radical Left SYRIZA was ruling – before being ousted in July 7 snap elections – it was reported that even a law requiring the use of Point-of-Service (POS) machines that take credit and debit cards to slow the use of cash that’s behind unstoppable tax cheating in Greece, customers and clients weren’t cutting back on using “plastic money.”
Many professionals, such as doctors and lawyers, have the machines as required but some say they are out of order and encourage payment by cash without giving receipts so they can hide their income, unlike salaried workers bearing the brunt of a nearly nine-year-long economic crisis who have been targeted by austerity measures.
Greece also stipulates that people don’t have to pay unless they get a receipt but that’s gotten around by offering customers and clients lower bills and fees if they pay by cash so both sides can evade taxes.
Some 25 percent professionals required to install POS machines have not recorded a single transaction over the last couple of years, according to data presented by the Commercial Cirector at Cardlink, Antigonos Papadopoulos, at the 6th Digital Forum organized in Athens by Ethos Media, the paper said then.
The event audience heard about he latest trends in online payments, that 25 percent of the points of sale (PoS) installed in 2017 and 2018 remain inactive. That amounts to almost 175,000 of the 700,000 terminals installed.
The annual value growth of electronic transactions conducted via Greek bank cards (excluding those by tourists) rose by 14 percent, against 17 percent growth in the same period of 2018 and 40 percent in 2017. Papadopoulos said this was because of the slow rise in the Gross Domestic Product (GDP) that fell some 25 percent during a nine-year-long crisis.
Thousands of self-employed professionals, including, accountants, engineers, electricians, and even taxi drivers, have installed card terminals to comply with legislation, but rarely use them.