The Inspector General of Public Administration Leandros Rakintzis has completed his report and made some revealing discoveries regarding illegal VA returns to farmers. Among the more spectacular cases is that of an 85-year-old woman who received 4 million euros in VAT returns for farming onions.
The damages incurred by the illegal VAT returns are massive for the State. Mr. Rakintzis notes early on that the problem with illegal VAT returns is partly attributed to the irregular rate of audits and partly the lack of efficient cooperating between tax offices.
Counterfeit invoices
According to the Rakintzis report, the trade of counterfeit invoices also grew to an unprecedented level, prompting the Inspector General to demand that all VAT return cases be reevaluated in each tax office separately. This process revealed that many cooperatives had not submitted tax and VAT returns or cumulative invoices, while the relevant tax offices had not performed any regular audits for over a decade.
According to the conservative estimates of SDOE, in Mainland Greece the State incurred damages worth 115 from counterfeit invoices and 7.5 million euros from illegal VAT returns. SDOE’s agency in Crete was unable to complete audits of individuals suspected of fraud due to evidence being destroyed. Many more such cases have been reported from other tax offices.
Tax havens
Mr. Rakintzis’ investigation lead him to Kranidi in Argolida, the co-called “Lichtenstein of Greece” due to the unusually high number of off-shores based there (186, of which 197 were active). The Inspector General attributed the high number off off-shores to the local tax office did not have an audit service.
After the intervention of the relevant Ministry of Finances services about 4 million euros of taxes were collected. Based on these results, the Inspector General has requested detailed information on the status of off-shores in the jurisdiction of each tax office.
