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Greece is a poor country with rich citizens

23 September 2011 / 21:09:11  GRReporter
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Kapeleris was promoted to Chief Secretary of the Ministry of Finance. Now he is dealing with a group of 1,700 citizens who have property worth one billion euros. "Only in 19 cases there is liability to the tax authorities in the amount of 76 million euros. We are determined to change many things, but we need time. We must change the entire system for collecting taxes. It makes me feel extremely uncomfortable to know how large the volume of unpaid taxes is when the middle-class suffers from their increase. We are making progress but still we have not reached the level from which we can collect money from those who have them." 

Nikolaos Lekas ​​fired 70 percent of the 1,200 employees of the Office for prosecution of economic crimes. "They were here for many years and were friends with their clientele too." Many of the new employees have to follow intensive computer courses. According to him they will be able to enter bank account and "freeze" them without having special permission from the court as they do now in the tax offices. 

According to economist Yannis Stournaras Greece is losing a historic opportunity. "Such opportunity only comes once. But the Prime Minister looked at the issue superficially and appointed his friends (naive youth) to senior positions." They promised to send all debtors in prison, but remained only with the threat. "They did not have the resources to implement these requirements. The rich have good lawyers and smart advisers" as a result of which many offshore companies appeared, yachts were registered in Turkey and money transfers were done to Switzerland, where in the Greek accounts, there are about 600 billion euros. "And the party goes on," says Stournaras. 

The island Mykonos moves in a very distant rhythm from the crisis. As one restaurant manager says: "There is no crisis on Mykonos, there is no crisis for us as well." There influx of customers is so large that sometimes necessary is even a ministerial intervention to ensure a sun bed on the cosmopolitan beach. 

Still, scandal was registered on the island. Inspectors from the Ministry of Finance found that in July 2009 the owners of a club did not issue invoices for 1500 tickets for the concert of singer Antonis Remos, but they were included in the accountant’s books. And although the fine should have been in the amount of 2,000,000 euros, the local tax administration reduced it to ten thousand euros. The case obviously was lost in the labyrinth of Greek justice, notes Stern magazine. 

"The system leads people to the judicial path when they receive notes, which say they owe large amounts," says lawyer Leonidas Hamodrakas. "But in order for the procedure to start it needs from six to eight years. The state rarely manages to collect this money. In most cases it is not about corruption, but just about a missing effective mechanism, coordination and organization." 

At the same time it seems that notaries have a lot of work, since a large number of properties are being transferred to children or elderly people. Among the demands of clients are also transfers of luxury properties to offshore companies, mainly based in Cyprus. Thus, when the state sends a check for payment, debtors no longer have any property in their name. 

Greeks owe a total of 41 billion euros to the state in unpaid taxes. Recently a list was issued of 8000 companies along with 6500 citizens who owe 90 percent of the total. During his election campaign, Prime Minister George Papandreou was showing this list saying "There is money." Now even the pro-government newspaper Ta Nea defines the list as "ghost list", also states the German magazine. 

Inspectors are also after companies that have declared bankruptcy in the last 20 years. Lawyer Leonidas Hamodrakas represents a construction company that is listed because of obligations to the state amounting to three million euros. "The company however has declared bankruptcy in 1996. There is nothing they can take from it. Things are the same in most companies." 

According to Professor Rombolis the state is likely to be able to collect about eight billion euros from all obligations. "The government has no plan and state structures are the same as before. Even if someone manages to collect all the money, now worth 350 billion euros, after ten years the Greeks would be in the same situation as they are today. The reforms that the European Union is offering will make things even worse." 

Although currently there is a continuous increase in taxes, state revenues are decreasing and the economy is shrinking. Gross domestic product fell by 10.2 percent in the last 10 years and foreign investments fell by 38 percent. The budget deficit and unemployment rose and the government announced a new additional tax of up to 10 euros per square meter on the property, which is expected to be paid together with the electricity bills. 

In conclusion, Professor Savas Rombolis tells the journalist from Stern: "We need someone to clearly tell to all rich people that things will get worse for them as well if they do not contribute. If they do not do anything a day will come when the poor will set their houses on fire." 

Tags: Greece economy crisis debt tax evasion rich middle-class
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