The Greek State is missing out on 7.5 billion euros from uncollected VAT on an annual basis, according to a study carried out by the Center of Planning and Economic Research (KEPE). The study estimated the shortfall by calculating the difference between the real and potential VAT revenue, based on the national accounts. As such, KEPE argues, Greece is near the bottom of the relevant European lists.
Since 2009, the Greek state’s VAT shortfall has been estimated to be between 29% and 38%. Other European countries that received bailouts are far more efficient in VAT collection. Portugal has a particularly low rate, while in the case of Spain the rate is between 13% and 19% in the past three years.
KEPE underlines in its stud that it is imperative to improve the efficiency of the VAT collection mechanism and develop a tax-paying awareness amongst the people. According to KEPE, at the root of the problem is restoring the taxpayer’s trust in the State regarding the management of taxes.
