Greek Finance Minister Euclid Tsakalotos speaks at a press briefing in Athens, capital of Greece, on March 30, 2017. Greek Finance Minister Euclid Tsakalotos presented on Thursday a new tool which will help the Greek state to combat widespread tax evasion. (Xinhua/Marios Lolos)
ATHENS, March 30 (Xinhua) -- Greek Finance Minister Euclid Tsakalotos presented on Thursday a new tool which will help the Greek state to combat widespread tax evasion.
He also acknowledged the increased strain on the middle class from the tax hikes implemented to address the debt crisis.
An automated application will help tax office inspectors trace tax dodgers by crosschecking within two minutes their tax declarations of past years to bank deposits and other assets, the minister announced in a press briefing.
In cases of major divergence a more thorough investigation into the tax payer's finances will allow the tax office inspectors to have a clearer picture within a week instead of the average 18 months needed so far.
Suspected tax evaders will be then called to provide explanations. Should they not be able to justify their increased wealth in line with their tax declarations, they will face fines.
"This work could have been concluded in the past if previous administrations had the political will and I am saying they did not," Tsakalotos said, expressing the current government's determination to effectively deal with tax evasion.
The official also appeared confident that more tax dodgers will now feel the pressure and will opt to voluntarily disclose their hidden wealth to avoid heavier penalties.
Tax Office inspectors will first use the application focusing on about 1.3 million taxpayers whose names were included in lists of major depositors to foreign banks, such as the famous so-called Lagarde list, general secretary for Public Revenue Yorgos Pitsilis said.
The Greek state loses about 16 billion euros (17.1 billion U.S. dollars) annually, which accounted for about 9 percent of Greek GDP, in recent years from tax evasion, despite the efforts made to combat the phenomenon after the start of the debt crisis seven years ago, according to a new study released earlier this March by Athens-based think tank DiaNeosis.
According to 2014 tax declarations, 120,000 people, or 1.6 percent of taxpayers, are paying 2.7 billion euros, about 29.5 percent of the total income tax, as most Greeks declare small incomes.
Even though a large part of Greek society has been hit hard by the debt crisis, suffering from chronic unemployment and salary and pension cuts, crosschecks by the tax office in many cases have revealed chronic tax evasion.
According to the authors of the report, the main causes of tax fraud are over taxation, the lack of political will to tackle the phenomenon and a complex and unstable complex tax system.
Asked to comment on the issue of over taxation, Finance Minister Tsakalotos acknowledged that Greeks are facing increased burdens in recent years, but dismissed the criticism that the middle class is strangled.
"I have said we have strained, not razed the middle class," he said.
The minister, however, refused to make a statement during the press conference regarding the ongoing talks with Greece's international lenders to close the second review of the third Greek bailout program.
Addressing the parliament, he just said Athens is close to a deal with its creditors on the review.
According to sources within ruling party MPs who were briefed by Tsakalotos on the progress, a staff level agreement could be reached by this weekend opening the way to the conclusion of the review which should have closed in February 2016 based on the initial timetable.
Labor rights and the liberalization of the energy market were the last two obstacles in talks in recent weeks.
