How exactly do you solve a problem like Greece? Well, all I can say is, I’m glad I’m not the one who has to try! It does seem fairly obvious though that part of the problem is that Greece doesn’t collect enough tax.
Now, I’m all for low taxation of course. And I think raising rates of tax in Greece will, for the most part, be counterproductive. Because not only will this endanger the nascent economic recovery, but probably encourage yet more tax avoidance and evasion in a country that seems to have transformed tax dodging into an art form – the amount of tax evaded each year in Greece can be as much as 14 percent of gross domestic product, according to EY.
What seems to be the root of the problem is a narrow tax base and relatively high tax rates. If … Read More »
So what was the point of all that then? I refer of course to the humiliating conclusion for Greece in its attempt to renegotiate its bailout terms. Almost unbelievably, after six months of deadlock and brinksmanship, Athens has seemingly managed to secure itself worse terms than those it originally protested against, and significantly worse ones than were on the table just a short while ago.
I keep reading and hearing in the media that Greeks will be subjected to harsh new tax rules as part of the agreement. It’s certainly true that the screw will be turned ever tighter on tax evaders. However, the statement summarizing Greece’s obligations, which was released after the Euro Summit on July 12, barely mentions the word “tax.” In fact, taxation is referred to twice, and both references are vague in the extreme: streamlining the VAT … Read More »
It’s not easy to find positives where Greece is concerned, but this benighted country, which could be teetering on the brink of economic oblivion once again, came out surprisingly well in a recent report on the taxation of ICT goods and services – computers, cell phones, tablets, internet access and an array of other digitally-delivered services – around the world. While other industries continue to contribute more taxes to help pull Greece out of its fiscal Slough of Despond, the ICT sector is getting away rather lightly according to the report by the Information Technology and Innovation Foundation, which found that Greece is the only OECD country to feature in the top-20 of its league table, with an overall tax and tariff burden of less than 10 percent. Tragically, but at the same time unsurprisingly, the countries with the highest … Read More »
In Russia, they dream in winter; but in Greece they dream in summer. Because it’s too cold in the first case, and I suppose because it’s too hot in the second. At all events, Prime Minister Antonis Samaras is promising to reduce all types of tax over the next few years, and predicts EUR55bn of incoming investment over the same period. There are a few inconvenient factlets standing in his way, however, and we won’t even consider the fractured state of Greek politics. First, GDP has shrunk by more than 25 percent since recession hit in 2008, and continued to fall in the first quarter of 2014; second, the unemployment rate increased in the first quarter of 2014 to about 27 percent, and in the 15 – 24 year age group is running at 57 percent; third, Greece has been … Read More »