SPECIAL REPORT: 36 bl in owed taxes… I say take a stroll in Kifissia Mr. Papandreou

Almost 36 billion Euros in taxes is owed by over 980,000 people in this country, 92 percent of which is owed by no more than 14,000 people! Yes, yes… you heard correctly only 14,000 people, and I bet my drawers that they all live in Kifissia and beyond. This probably crumbles all those theories worldwide that claim that all Greek people are crooks, lazy and basically freeloaders. It is a sad truth… but in Greece, the more money you have, the less taxes you pay. In other words, if you live in a mansion in Kifissia, or Ekali, or some other ritzy northern suburb in Athens, have two maids, an indoor and outdoor pool, two gardeners, a cook and ten automobiles you can get away with declaring an income of 10,000 a year. Whereas common every day citizens who live in Piraeus for example, who rent a flat no more than 32 square meters, who have no automobile and all the above are obligated by law to declare 14,000 a year and if they do not have any money to pay, then they will be jailed. 
Does that sound fair and just to you?
It is NOT… its ludicrous. The rich continue to get richer, and the poor continue to get poorer while the middle class will completely be wiped out in a few years.
In such a framework the Greek government is considering the use of private tax investigators in order to hunt down the 14,000 tax evaders! “There are 14,000 people in Greece, which together owe the state some 36 billion Euros in taxes,” said Prime Minister George Papandreou, the “Financial Times Germany”. “In this group, the finance minister now wants to concentrate. We will probably outsource the task to private companies.”
I say who needs to hire investigators… take the Kifisso highway up to the posh area of Kifissia and Ekali… Greece’s Beverly Hills, and wonder about the neighbourhoods and the quaint boutiques… all your tax evaders are there!!!

In the suburb of Kifissia, amid clean, tree-lined streets full of designer boutiques and car showrooms selling luxury marques such as Porsche and Ferrari, live some of the richest men and women in the world. With its streets paved with marble, and dotted with charming parks and cafes, this suburb is home to shipping tycoons such as Spiros Latsis, a billionaire and friend of Prince Charles, as well as countless other wealthy industrialists and politicians.

One of the reasons they are so rich is that rather than paying millions in tax to the Greek state, as they rightfully should, many of these residents are living entirely tax-free. Along street after street of opulent mansions and villas, surrounded by high walls and with their own pools, most of the millionaires living here are, officially, virtually paupers.
How so? Simple: they are allowed to state their own earnings for tax purposes, figures which are rarely challenged. And rich Greeks take full advantage.
Astonishingly, only 5,000 people in a country of 12 million admit to earning more than £90,000 a year — a salary that would not be enough to buy a garden shed in Kifissia.
Yet studies have shown that more than 60,000 Greek homes each have investments worth more than £1m, let alone unknown quantities in overseas banks, prompting one economist to describe Greece as a ‘poor country full of rich people’.
Even more incredibly, Greek shipping magnates — the king of kings among the wealthy of Kifissia — is automatically exempt from tax, supposedly on account of the great benefits they bring the country.
Yet the shipyards are empty; once employing 15,000, they now have less than 500 to service the once-mighty Greek shipping lines which, like the rest of the country, are in terminal decline.

FAKELAKI TO GET THE JOB DONE

Manipulating a corrupt tax system, many of the residents simply say that they earn below the basic tax threshold of around £10,000 a year, even though they own boats, second homes on Greek islands and properties overseas.
And, should the taxman rumble this common ruse, it can be dealt with using a ‘fakelaki’ — an envelope stuffed with cash. There is even a semi-official rate for bribes: passing a false tax return requires a payment of up to 10,000 Euros (the average Greek family is reckoned to pay out £2,000 a year in fakelaki.)

FISHERMAN TALES OF CRACKING DOWN ON THE “PRIVLEGED”SOCIETY

With Papandreou calling for a crackdown on these tax dodgers — who are believed to cost the economy as much as £40bn a year — he is now resorting to bizarre means to identify the cheats. After issuing warnings last year, government officials say he is set to deploy helicopter snoopers, along with scrutiny of Google Earth satellite pictures, to show who has a swimming pool in the northern suburbs — an indicator, officials say, of the owner’s wealth.
Officially, just over 300 Kifissia residents admitted to having a pool. The true figure is believed to be 20,000. There is even a boom in sales of tarpaulins to cover pools and make them invisible to the aerial tax inspectors.
‘The most popular and effective measure used by owners is to camouflage their pool with a khaki military mesh to make it look like natural undergrowth,’ says Vasilis Logothetis, director of a major swimming pool construction company. ‘That way, neither helicopters nor Google Earth can spot them.’

IN FEAR, EVEN MORE OFF-SHORE COMPANIES ARE FORMED

Faced with the threat of a crackdown, money is now pouring out of the country into overseas tax havens such as Liechtenstein, the Bahamas and Cyprus.’ Other popular alternatives include setting up offshore companies in Cyprus or the British Virgin Islands, or the purchase of real estate abroad,’ says one doctor, who declares an income of less than £90,000 yet earns five times that amount.
There has also been a boom in London property purchases by Athens-based Greeks in an attempt to hide their true worth from their domestic tax authorities. ‘These anti-tax evasion measures by the government force us to resort to even more detailed tax evasion ploys,’ admits Petros Iliopoulos, a civil engineer.
Hotlines have been set up offering rewards for people who inform on tax dodgers. Last month, to show the government is serious, it named and shamed 68 high-earning doctors found guilty of tax evasion. ‘We will spare no effort to collect what is due to the state,’ said Evangelos Venizelos, the new Greek finance minister of the socialist ruling party. ‘We promise to draft and apply a new and honest tax system, one that has been needed for decades, so that taxes are duly paid by those who should pay.’

AND MORE MONEY IS CHANNELED TO SWITZERLAND

Papandreou believes many of the billions that have been withheld from the Greek taxman are lying in Switzerland. This, however, is largely the fault of Athens, according to Swiss-Greek economist Spyridon Arvanitis. Ultimately, the only people who know how much untaxed Greek money is in Switzerland are the banks.
“I’ve heard every amount possible – even up to the sum of the Greek debt,” Arvanitis, from the Swiss Economic Institute (KOF) at the Federal Institute of Technology Zurich (ETHZ), told swissinfo.ch. “There are rich Greeks, but talk of €200 billion (SFr230 billion) is getting carried away.”
At any rate, Greek Finance Minister Evangelos Venizelos has told his Swiss counterpart Eveline Widmer-Schlumpf that Greece now wants to act and agree a withholding tax with Switzerland, similar to the one currently being negotiated with Germany and Britain.
Arvanitis believes an exchange of information wouldn’t cause problems for Switzerland “as long as it’s not a fishing expedition but a concrete list of ten, 15 names of people suspected of keeping untaxed money here”.
Fishing involves investigators trawling through masses of data in the hope of netting someone who might be committing a crime. He says Switzerland shouldn’t offer any more than it has already done to other European countries. “That would be enough to establish a bit of order. Concrete cases of tax fraud or evasion could also be submitted. And in cases where a firm suspicion exists, it’s already possible to make a request for legal assistance,” he said.
Good sign
Arvanitis said he wasn’t surprised by Papandreou’s comments in the Financial Times Deutschland. “That’s always been known in the EU. It’s also been known that nothing’s been done about it. Nevertheless I see Papandreou’s comments as a good sign for Greece – if the prime minister addresses this problem in an interview, in front of the world, obviously he can’t now turn away from it.” He added that owing to the meshing of politics and the economy it was understandable why until now there hadn’t been any talk of the large tax evaders. “But the €36 billion has been known about for at least 18 months and as yet no one’s tried to round it up,” he said. “Without political protection and corruption it wouldn’t be possible for individuals to owe millions in taxes. The €36 billion is owed on income that has been declared. And the real figure is thought to be 25 per cent more. One can only speculate on what else has been hidden away.”

YOU COOK THE FISHES… YOU CLEAN THE DISHES

Yet, already, it is too late. Greece is effectively bust — relying on EU cash from richer northern European countries, but this has been the case ever since the country finally joined the euro in 2001. Two years earlier, the country was barred from entering because it did not meet the financial criteria.
No matter: the Greeks simply cooked the books (back in 2000). Two years later, having falsely claimed to have met standards relating to manufacturing and industrial production and low inflation, the Greeks were allowed in.
Funds poured into the country from across Europe and the Greeks started spending like there was no tomorrow.
Money flowed into all areas of public life. As a result, for example, the Greek school system is now an over-staffed shambles, employing four times more teachers per pupil than Finland, the country with the highest-rated education system in Europe. ‘But we still have to pay for tutors for our two children,’ says Helena, an Athens mother. ‘The teachers are hopeless — they seem to spend their time off sick.’

TAX COLLECTION IS TOTALLY IDLE

Arvanitis said people he knew in Greece believed even a state of emergency was necessary. One must patronise the tax departments a bit, he said. “That is obviously not ideal from a constitutional point of view, but every constitution allows for emergency laws in emergency situations. And if a country is basically on the verge of bankruptcy, that’s an emergency situation.” He is not thrilled by Papandreou’s view that collecting taxes would probably be outsourced to private companies.
“If you’ve got problems with corruption, without further ado select 20, 30, 40 good judges – those exist in Greece too – who can work on the tax cases from morning to night and reach a final decision, without recourse possibilities lasting for years. And the next day the bailiff demands the money from the tax evader. Done.” This, he said, would send a good signal to the financial markets, European governments and the Greek people.
Instead of going after the big tax evaders and laying off a few public sector workers who are worthless… the government wants to further raise the Value Added Tax (VAT). This is totally ridiculous. 
Arvanitis isn’t convinced. “Slapping on another two per cent would be fatal for the economy. And it’s not even guaranteed that you’d be able to collect the money because the attitude towards paying taxes there is poor,” he said. Bans are also no solution, in his opinion. “You can’t suddenly limit capital transactions. That goes against all logic, including what else is going on in the European Union,” he said.
Sources:
 
Enhanced by Zemanta
Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s