“Greeks consider taxes as theft,” which, among other things, explains, as WSJ reports, at the end of 2014, Greeks owed their government about €76 billion in unpaid taxes accrued over decades; the government says only €9 billion of that can be recovered, with most of the rest lost to insolvency. Syriza is now making tax collection a top priority among the measures promises the new Troika, but as one government official warned, “the Greek economy would collapse if the government were to force these people to pay taxes.” The bottom line is that “normally taxes are considered the price you have to pay for a just state, but this is not accepted by the Greek mentality,” and perhaps with this latest round of deference to the EU overlords, it is clear why…
Greece’s new government, scrambling to secure another tranche of short-term funding, agreed on Tuesday to make tax collection a top priority on a long list of measures. Yet previous governments have made similar promises, only to fall short.As The Wall Street Journal reports,
“Greeks consider taxes as theft,” said Aristides Hatzis, an associate professor of law and economics at the University of Athens. “Normally taxes are considered the price you have to pay for a just state, but this is not accepted by the Greek mentality.”
Indeed, for most Greeks tax evasion isn’t considered a serious crime and there is little stigma attached to getting caught, unlike in other European countries or even the U.S.
Kosmas, a 32-year-old chef in Athens, says his income taxes are automatically deducted from monthly paychecks. But every time he buys something and he is given an option to pay less if he doesn’t ask for a receipt, he says yes.
“It is a win-win situation,” he said. “I pay less for the products and the store pays less in taxes.”
The government’s tax-revenue shortfall in January alone was 23% below its €4.5 billion target for the month.
Last week, the government outlined plans to forgive up to 50% of individuals’ tax arrears, a sign would make good on its campaign rhetoric.
Syriza would risk a popular uprising by the very people who put it into power if it were to back away from those policies and get tough on taxes, political analysts warn.
Even within the government’s own ranks, officials say Syriza can’t risk tougher enforcement.
The reason isn’t just political, but economic.
“The Greek economy would collapse if the government were to force these people to pay taxes,” said one senior government official.
And it seems they are already in trouble…
Greece admitted on Wednesday it will struggle to make debt repayments to the IMF and the European Central Bank this year as Germany’s finance minister voiced open doubts about Athens’ trustworthiness.
A day after euro zone finance ministers agreed to a four-month extension of a financial rescue for the currency bloc’s most heavily indebted member, Finance Minister Yanis Varoufakis gave a frank assessment of Greece’s financial position.
“We will not have liquidity problems for the public sector. But we will definitely have problems in making debt payments to the IMF now and to the ECB in July,” he told Alpha Radio.
