A national sport no more
Greek tax dodgers are being outed
Greek officials used to shrug off tax evasion as “a national sport”. The finance ministry focused on raising revenue through indirect taxes such as value-added tax. Meanwhile income from a flourishing black economy financed the building of second homes on the islands, in Greece’s Arcadian heartland or moved into bank accounts abroad.
Those days are over. As Greece struggles to put its public finances in order, property owners have been hit by a volley of new taxes and holders of Swiss bank accounts are under uncomfortable scrutiny. Hot Doc, an investigative magazine, recently published a list of 2,000 Greeks who kept accounts at a Geneva branch of HSBC.
Costas Vaxevanis, its editor, is adamant that to publish the list was in the public interest. (Many hard-up, law abiding Greeks would agree.) He argues that reforms of taxation have not gone far enough, despite recent efforts by the conservative-led coalition government of Antonis Samaras to pursue 54,000 taxpayers who sent 22 billion ($28.5 billion) abroad in 2009-11. About 15,000 people transferred funds that were not declared to the tax authorities; the government now hopes to rake in an extra 2.25 billion in taxes.
Mr Vaxevanis is due to be tried in Athens on November 1st on charges of violating data-privacy laws by publishing the list that contains names of politicians, shipowners and businesspeople. He accepts that some accounts held legitimate funds. Yet many of the 200 people contacted by the Hot Doc team either claimed the list was a fake or begged him not to publish their names, he says.
Those most embarrassed by the revelations are two former socialist finance ministers, George Papaconstantinou, and his successor, Evangelos Venizelos, now leader of Pasok (the PanHellenic Socialist Movement). In 2010 Mr Papaconstantinou requested the list, put together by a former HSBC employee, from Christine Lagarde, then his counterpart in France. He asked Ioannis Kapeleris, the head of SDOE, the Greek financial police, to check out ten names. Although they turned out to be suspected tax evaders, Mr Papaconstantinou never pursued the matter. The CDs containing the names and a copy made on a USB stick were “mislaid”, Mr Papaconstantinou told parliament. The next head of SDOE, Ioannis Diotis, a former public prosecutor, told Mr Venizelos an investigation into the stolen list could face legal problems. The matter was quietly dropped.
Yannis Stournaras, the current finance minister, a technocrat, has asked Paris to send another copy of the list, which dates from 2007. Yet it may still be hard to catch up with tax evaders. According to Mr Kapeleris, delays in digitising tax records have meant that many documents going back more than five years are shredded.
The sheer scale of Greek tax evasion angers the European Union and IMF officials trying to knock Greece’s economy back into shape. One recent study suggested up to 30 billion of revenue goes uncollected every year. Ms Lagarde, now the IMF managing director, has said publicly she cares more about village schoolchildren in Niger than Athenians “who are trying to escape tax all the time.” Mr Vaxevanis’s trial will be closely watched.