The European Tribune is a forum for thoughtful dialogue of European and international issues. You are invited to post comments and your own articles.
Please REGISTER to post.
It's at 25%.
Now, assume that if Greece were like every other European country, it only had 20% tax evasion.
Well, let's look at its tax collection. It's at 140 billion. 5% of that is 7 billion. That's not enough to cut into a 350 billion deficit. We've only accounted for 2% of a 11-15% yearly budget deficit.
Taxes should be reformed in Greece BECAUSE they are unfair to those who pay. But from a macro perspective outside Greece, here are the numbers reported by Eurostat for the last decade:
Greece collects between 40-43% of its GDP annually. The EU collects 44%.
In Greece, 8% of GDP is collected as income tax revenue. 12% social contributions. 5% corporate. 16% VAT and sales tax.
The actual rate of tax collection in Greece is on par with tax collection in Europe. In fact, I would argue that in Greece, tax collection actually exceeds that of most of Europe when you take into account two factors: Shipping and Tourism. Those two industries account for almost 40% of Greek GDP. Tourism is cash heavy, and outside of using credit cards, I'd imagine its an industry with high evasion. Shipping revenues and profits are untaxed precisely because the ships can register in any port, under any flag. The ship owners pay a tonnage tax for the weight of ships only. So here with shipping we account for 20% of the nation's GDP, but for hardly any of the country's taxes. This literally means that when you back out shipping, the GDP subject to tax is smaller, and thus the % of tax to GDP collected is much higher.
To roll back high tax evasion of high taxes would be a very good thing for Greece, but not a solution. After all, high tax evasion of high taxes already yields more revenue than the low tax evasion of low taxes. In the USA, we have hedge fund managers who pay 15% on earnings.
by Frank Schnittger - May 20 14 comments
by Frank Schnittger - May 20 3 comments
by Frank Schnittger - May 15 22 comments
by Frank Schnittger - May 19 3 comments
by Zwackus - May 12 18 comments
by Frank Schnittger - May 11 11 comments
by Zwackus - May 6 69 comments
by Bernard - May 6 41 comments
by Frank Schnittger - May 203 comments
by Frank Schnittger - May 2014 comments
by Frank Schnittger - May 193 comments
by Frank Schnittger - May 1522 comments
by Zwackus - May 1218 comments
by Frank Schnittger - May 1111 comments
by Bernard - May 641 comments
by Zwackus - May 669 comments
by Frank Schnittger - May 419 comments
by Frank Schnittger - Apr 2918 comments