VAT takings fall, evasion grows

The Finance Ministry hiked value-added tax rates in the hope of reaping an extra 1 billion euros in revenues per year, but what it got was less than half of that - and an explosion in the phenomenon of tax evasion.

A European Commission report showed that the VAT rate increases in 2015 and 2016 have resulted in tax evasion growing by almost 600 million euros per year: This was during a period when the top rate was raised from 23 to 24 percent, numerous commodities were moved from the 13 percent bracket to the 24 percent group, and the reduced VAT regime on the Aegean islands was abolished.

The report revealed that the VAT deficit (i.e. the difference between expected and actual revenues from value-added tax) amounted to 5.9 billion euros in 2016, despite the extensive use of credit and debit cards brought about by the capital controls. This was up from 5.35 billion...