January 07, 2011 / 08:54 IST
Greece, struggling to cut deficits and dig out of its debt crisis, is getting tougher on tax evaders, enforcing a new law that allows immediate closure of businesses that violate tax regulations.
On Thursday, six bars and night clubs in the broader Athens were shut down for 48 hours by the finance ministry's economic crimes unit (SDOE) for not issuing receipts to customers in an effort to evade VAT tax."Tax evasion is theft and represents a grave social injustice," the ministry said. "The closure of the six bars and nightclubs was part of a broader sweep of similar establishments in the Athens area showing a high degree of VAT evasion.It said over two-thirds of the establishments checked by SDOE inspectors in the sweep ended up being fined for tax offences.Scrambling to improve tax compliance and boost budget revenues in a recessionary economy, the law allows tax authorities to better assess citizens' tax liabilities based on objective criteria of their standard of living.The clampdown on rampant tax evasion includes stiffer penalties for tax offenders and judicial system reforms to shorten delays in processing tax cases.Budget revenues grew 5.4% last year to 51.1 billion euros, narrowly missing a 6% annual growth target. The government has increased the main VAT rate to 23%. Greece's budget deficit is expected to shrink to 9.4 percent of GDP in 2010, from an upwardly revised 15.4% in 2009. The government aims to reduce the fiscal shortfall to 7.4% this year. Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
