Dimitris Bokas keeps meticulous records of the bathroom fixtures he sells from his small shop in the quiet middle-class residential neighborhood of Koukaki near the center of Athens — just in case a tax inspector makes a surprise visit to ensure Greece’s 23 percent sales tax is being collected and reported correctly.
But Bokas also does installation and repair jobs — and half of those involve cash deals with no receipts for his labor. The result is that a job costing 250 euros ($275) goes for 125 euros because he doesn’t charge the client sales tax and Bokas doesn’t report the income for taxation. “I’ve got a receipt for everything I sell in my shop,” Bokas said. But tax officials “don’t know what my hands do.”
This kind of tax dodging is a Greek national pastime, costing the state billions of euros in revenue. Greece promised last week to get tough on tax evasion in return for a third European bailout expected to be negotiated over the next month. The talks, expected to last four weeks, will start if Parliament agrees by Wednesday to eurozone demands including tax hikes and pension cuts.
But experts say Greece has largely failed in previous crackdowns on tax evasion, which has been rampant for generations. An estimated 10 billion euros in taxes never makes it into government coffers annually — a significant factor in the country’s inability to pay its roughly 320 billion euros in national debt.
Tax dodging among Greeks started as a sign of patriotism during nearly four centuries of Ottoman rule that ended in 1821. It continues today amid mistrust over government spending and disdain over how the country’s various administrations have handled Greece’s financial mess after the economy imploded in 2009.