Greece Cracks Down On Longtime Tax Evasion Problem

Greece Cracks Down On Longtime Tax Evasion Problem

7:24pm Apr 08, 2015

Greeks don't trust their own state to give them good services, so for decades they have evaded taxes. Now the new leftist government says it will crack down on rich tax evaders to bring in revenue to pay back state debts.

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Greece is negotiating with fellow members of the eurozone in an effort to keep its bailout loans. But before they release more money, the lenders want to see progress on financial reforms, like a crackdown on tax evasion. As Joanna Kakissis reports from Athens, that's left the Greek government facing a Herculean task.

JOANNA KAKISSIS, BYLINE: Pantelis Chatzisinakis a slim, bearded 38-year-old accountant. He lives and works in a leafy Athens suburb. His office is neat. Framed maps are on the walls and stacks of tax forms are on his desk. He's here nearly every day.

PANTELIS CHATZISINAKIS: I spend all my Saturdays in the office and many Sundays, also.

KAKISSIS: Chatzisinakis works 11 hours a day. And though he makes the equivalent of only about $13,000 a year, he says he always pays all of his taxes, as do many of his clients.

CHATZISINAKIS: Sometimes I feel stupid because I pay all of my taxes. The state should be fair with us that pay the taxes.

KAKISSIS: By fair, he means a couple of things. First, Chatzisinakis says he has never seen his tax dollars really work for him. Schools, roads and state-funded health care are all bad. And now, five years into the debt crisis, he says poorer Greeks have been taxed far more than rich ones.

CHATZISINAKIS: The poor people paid 70 percent more taxes and the wealthy paid nine percent more.

KAKISSIS: A recent study by German academics into this issue showed that between 2008 and 2012, the tax burden on the poor actually increased by 337 percent. Haris Theoharis was once the country's top tax collector. Last year he left his job under duress because of micromanagement from the previous conservative government.

HARIS THEOHARIS: Unless you have support of the people you work with, there's no way to do your job properly.

KAKISSIS: And when it came to tax bills, the rich and influential complained the loudest.

THEOHARIS: Obviously, the noise coming from them was much higher. They have access to phone numbers and can pick up the phone and call, yeah.

KAKISSIS: The new leftist government wants to target rich tax evaders. The International Monetary Fund, which has financed some of the bailout loans to Greece, says this is a great idea. Elena Papadopoulou, one of the government's economists, says that this effort will encourage middle-class Greeks to trust the state and pay taxes.

ELENA PAPADOPOULOU: They won't feel like the idiots. They will feel that they contribute their fair share to something that is improving their everyday life.

KAKISSIS: Theoharis, the former tax collector, says creating a fair taxation system could take years. Changing the culture could take even longer. About a third of Greeks are self-employed, the highest rate in the European Union, and many evade taxes, he says.

THEOHARIS: Perhaps if I close my eyes and enter a random business, it tax evades. A bit or more, it's every business. So it's really a question of, what do you do when you find that business and how strict can you be?

KAKISSIS: Chatzisinakis, the accountant, says tax evaders are not all crooks.

CHATZISINAKIS: (Foreign language spoken).

KAKISSIS: He explains that these days with more than a quarter of Greeks unemployed, many people simply don't have the money to pay their taxes. It's become a choice, he says, between feeding the kids and paying electricity bills or paying your taxes. For NPR News, I'm Joanna Kakissis in Athens. Transcript provided by NPR, Copyright NPR.

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