ATHENS – Greece’s accelerating economy in the wake of the waning COVID-19 pandemic has brought another benefit: record tax income of more than 100 billion euros ($109.70 billion) shown in returns being filed.

That was despite runaway tax evasion and an inequitable tax system that takes up to 45 percent of home, gives shipping moguls tax breaks and has different rates for people in the same brackets, including incentives to lure pensioners and the skilled.

Many of Greece’s rich also hide their wealth in foreign bank accounts and various schemes to lower evasion have largely failed, leading to a vast minority of salaried workers who have deductions from their checks paying the bulk of taxes.

Initial data from returns that had to be filed by Aug. 2 showed

Taxes on individuals came to 4.5 billion euros ($4.94 billion) with only 2.24 million out of 6.4 million returns processed so far, while additional salaries – wage earners and pensioners – had an average tax assessment of 4,369 euros ($4794.21) in 2023.

The rise was largely attributed to digitizing returns and cross checking income sources, including bank accounts – not those outside the country – and an imputed income rule taxing people based on their possessions as well as income.

The New Democracy government is planning to revise presumptive taxes on freelancers who protested changes that could see their taxes triple while doctors, lawyers and other professionals who take cash are hiding much of their income.

The freelancers took to the streets of Athens earlier in demonstrations against what they said would be unfair rules targeting them although the government had insisted it would reduce evasion and more accurately calculate real earnings.

Greek governments have tried a range of methods to try to increase tax revenues, including requirements that receipts must be given and that Point of Service (POS) devices tied to the tax department must be used.

But violators get around that by reportedly sometimes declaring their POS machines don’t work or that their Internet is done and they can’t use them, instead requiring cash for their services or goods.

In November, 2023, Balkan Insight reported that data from Greece and the European Union showed that because of evasion the average regular employee pays more tax annually to the state than most self-employed freelancers.

https://balkaninsight.com/2023/11/22/greek-freelancers-protest-against-new-tax-bill/

The Ministry of Finance said 71 percent of freelancers declare an income lower than the minimum wage of 9,960 euros ($10,917.42)  and Finance Minister Finance Minister Kostis Hatzidakis said freelancers’ declared income was suspicious.

He also said that, “54 percent of freelancers last year reported losses, or zero income at most, and 27 per cent reported five years of continuous losses or zero income. So a question arises especially for the last category: How do they live?”

The average income tax collected by the state from 85 percent of self-employed people, about 425,000 of them, is 217 euros ($237.86) per year, an amount that rises to 867 euros ($950.34) with the presumed income.

The government is reportedly planning to make changes to the new rules though because the backlash saw the ruling New Democracy take big losses in votes in the June elections for European Parliament.

Corporations, meanwhile, pay just 22 percent in taxes, half that of people with incomes of more than just 40,000 euros ($43,845) annually and governments keep changing rates that see differences for people in the same bracket.