Size of black economy reaches 20.9% of Greek GDP, BoG governor says

The size of black economy in Greece reaches 20.9% of the country’s Gross Domestic Product, Bank of Greece governor Yannis Stournaras said on Tuesday. Addressing the 19th Tax Forum, the central banker said that the problem of tax evasion is one of the most important problems facing global economies. In Greece, despite the fact that it is difficult to assess the exact size of tax evasion, several surveys highlighted that the problem is bigger than in other countries and as a result it should become a priority to combat tax evasion and to promote a more fair distribution of tax burdens. Stournaras said tax evasion was more evident among self-employed and very small enterprises, but tax evasion was notable also in indirect taxation with Greece recording the fourth highest VAT gap in the EU, equal to 19.7% of total VAT (or 3.0 billion euros).

The central banker recommended six measures to deal with the problem: expanding the use of e-transactions and the use of POS, offering incentives for payments through debt cards and through banks, offering incentives in the form of tax exemptions to reveal transactions in sectors of high tax evasion practices, upgrading electronic tools of the Public Revenue Independent Authority, simplifying the tax system and intensifying efforts to cultivate tax conscioussness.