Reports Of Greek Tax Evasion Greatly Exaggerated

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A Washington Post claim that Greek taxpayers failed to pay 89.5 percent of their 2010 tax bills is greatly exaggerated, according to the BBC.

The “89.5” percent figure is taken from a study by the Organisation for Economic Co-operation and Development (OECD) and refers to accumulated tax debts from prior years rather than the tax bill from 2010.

Unlike other countries, Greece does not write off tax debts which have aged beyond the point of likely collection, so to some observers Greece’s deficiency in tax receipts looks worse than it actually is.

Indeed, in 2010 Greece collected 34 percent of its gross domestic product (GDP) in tax receipts, only slightly behind the United Kingdom (which collected 35.5 percent of its GDP) and Germany (which created 38.3 percent of its GDP).

However, this does not take into account Greece’s informal cash economy. According to a 2009 estimate, transactions which are partially reported or not reported at all to tax collectors made up 27.9 percent of Greece’s GDP, compared with 27 percent of Italy’s, 16 percent of Germany’s and 12.5 percent of the United Kingdom’s GDP.Greece lags behind the EU standard when it comes to collecting VAT and Social Security taxes.

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