One does not need any divs to realize that there was a huge tourist boom in Greece over this summer, nor is any imagination required to see how incomes increased spectacularly in all of the country’s tourist areas.
One will however need to bring up divs in order to confirm that the tourist boom that began in May and is carrying on in most of Greece in the early autumn months has not affected public revenue, since it is blatantly obvious to the naked eye that uninsured employment and tax evasion are still raging on.
What is going on is incredible; anybody who can avoid the Tax services is avoiding them.
Next to legitimate financial activities and within the tourist industry businesses themselves, a “shadow economy” is rapidly developing, which operates outside the regulations of a contemporary society, namely one that provides compulsory insurance for employees, payment of VAT and declaring actual incomes for taxation at the end of the year.
Greece has always had a huge shadow economy, with one of the highest rates amongst developed countries. What is going on this year though is unprecedented and this is unfortunately confirmed by the numbers.
While Greece is breaking one record after the other and is expecting to receive more than 21 million tourists by the end of the year (from 17.5 million tourists last year) and the income directly attributed to tourism is set to increase by 2 billion euros (13.5 billion euros total, from 11.5 billion euros in 2013), this is not reflected in tax revenue and more importantly, neither is unemployment reduced.
The inflow tax revenue documented at the end of July, where VAT revenue is a primary index, barely managed to match the levels of 2013. The rate of unemployment was 27.2% in May and remained above 26% throughout out the summer months, causing concern amongst those in charge.
In other words, in financial terms, the economy developed as if there was no tourist boom.
Zois Tsolis
– Originally published in the Sunday print edition
