Galery

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Recently, the Greek economic police have arrested at least eleven "big fish" owing large amounts in unpaid taxes. Regular taxpayers squeezed by heavy extra taxes approve the news that people who have appeared only in economic sections in the press and on glossy pages of luxury magazines have been handcuffed and taken to the police. However, once again things are not exactly what they seem.

According to court sources, it will be difficult for the state to obtain the millions due because the law for hidden taxes itself offers big debtors an "emergency exit".

"It is extremely difficult for the state to manage to obtain the amounts due from the well-known businessmen captured, because a specific procedure, which obliges them to pay the money, is not provided," they state.

"The law, introducing the fast-track procedure for large debtors to the state is about to become pointless. This is because the crime of tax evasion is in the middle of the categorization of crimes. This means that it does not provide for custody, as in the case of businessmen who owe VAT in excess of € 75,000 and taxes amounting to over € 150,000. In these cases, the offence is of the highest degree, and therefore, criminal procedures are more stringent for offenders," claim judges and prosecutors.

Furthermore, the fast track court, which will hear the cases of the detained businessmen does not even have the power to impose restrictive measures such as prohibition to leave the country. The Court does not even have the power to order the offender to go to the police station at regular intervals or to determine a financial guarantee, which is usually calculated based on the financial resources of the detainee.

Therefore, a man owing millions to the state may, by law, defer the case for an indefinite period of time and leave the country in the meantime. It appears that arrest for a period of three to five years, which is provided for tax evasion, is the only means for the state to pressure its debtors.
 
However, there is an escape clause in the law even here. Even if convicted, the debtor may still remain at liberty, because the sentence can be challenged by appeal. In this way, the defendant is not sent behind bars at least until the appeal request is examined.  

Other justice sources claim that the measure is sufficient to allow the state to collect the taxes due to it, namely because it provides for the fast-track procedure. "There is a capture and public exposure of the defendant, his or her name is disclosed." According to them, the debtors would agree to start paying their obligations gradually just to avoid eventual conviction, because the law says that criminal persecution against them shall be suspended after paying the amounts due.

The case of the owner of the chain of slimming centres Bodyline, Leon Levy, will be heard tomorrow. He was arrested two days ago, but requested a deferral to prepare his defence in court. He was seized for unpaid taxes exceeding the amount of € 600,000. The owner of the largest Greek company producing plastic pipes George Petzetakis, who owes more than € 2 million has had a second deferral. According to his lawyer, Levy has preferred to pay staff salaries instead of taxes. Furthermore, he was unable to make use of his real property.

Although the economic police use the same tactics, the process of capturing debtors is different for each of them. The difference is related to the type of unpaid obligations. If the detained person owes taxes, fast-track procedure is somewhat more flexible, but if they have not paid VAT, things are more stringent.

A precedent has been set in Thessaloniki with the capture of the businesswoman Fanny Katsou, the owner of Fanny AE consortium. The five large shops in the FENA retail chain offer luxury and designer clothing, shoes, handbags and accessories. The owner was taken to the investigator in charge of non-payment of VAT worth over € 75,000.

Two more businesspersons were arrested in Thessaloniki for unpaid VAT. They are a 47-year- old woman engaged in retailing who owes € 143,000 and a 63-year-old owner of a clothing company, who has concealed € 146,000.

From those captured in Athens, only the executive manager of the construction company ATTIK-AT, Panagiotis Panousis has not paid VAT. His obligations amount to € 7.9 million. He argues that the amount has accumulated from the realization of government contracts for which the state has not paid the VAT.

The owner of a company for meat and meat products Astros Kinourias from the Peloponnese was arrested for similar charges He owes € 511,000 in unpaid VAT.

All others: The owner of Nicholas hairdresser’s chain, the owner of the Bodyline chain, Leon Levy, and George Petzetakis are detained for non-payment of taxes. Yesterday, three businesspersons were added to the list. Two of them are from Thessaloniki and the other one is the 74-year-old former owner and manager of a construction company in Athens. The case file shows that Ioannis Bendias owes the state about € 176,000. Theses liabilities are owed by the construction company, which he closed in 2005. The economic police have found the 74-year-old man at his home in the Athens suburb of Paleo Faliro. The man was not captured because the prosecution had not issued an order due to his serious health problems. According to sources, the construction company was quite large and realized mostly private but sometimes public projects.

At the same time, many businesspersons are unfairly threatened with arrest. They are owners of companies that realize government contracts and owe VAT because the state has not paid its own debts to them. Currently, the amount that the state owes the companies is € 5 billion.

Moreover, according to the chairman of the union of retailers and craftsmen, Dimitris Asimakopoulos, the state refuses to deduct the obligations of businessmen from the amounts payable by it. Another problem is the delay of payments by their customers and cheques without cover.

In a letter to Minister of Finance Evangelos Venizelos, the union calls for the immediate deduction of companies’ liabilities from state's obligations to them and for the implementation of the European Directive, under which the state is obliged to pay the amounts due within 30 days. As for VAT, it has been proposed that the tax be deposited at the time of payment, and not at the time of purchase. According to the present practice, when the state buys a product or a service from a private company, its owner is obliged to pay the VAT within one to three months. At the same time, the state delays VAT return for months. The same applies for sales and purchases between companies, and the only difference is that the payments are made by checks of extended repayment period.

It has been suggested by the union of retailers and craftsmen that a law be applied under which if the sale is on credit and cheque, the buyer should be obliged to pay VAT to the seller within one month of invoicing. Otherwise, the invoice should be deemed invalid. They propose that the same scheme be applied to transactions between private owners and the state. In this case, the customer should pay the VAT on the invoice within one month of issuing the invoice directly to the tax offices.