Why Greece is Targeting Tax Evaders

Greece is hurting financially and the new interim government think it has a solution: Go after tax evaders.

Tax evasion has been a big problem and the government is releasing the name of more than 4,000 tax evaders, many of them being celebrities.

Anchor Lisa Mullins talks with Helena Smith, a reporter with the Guardian newspaper in London.

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Lisa Mullins: I’m Lisa Mullins and this is The World. Mitt Romney finally did it. The embattled GOP presidential candidate has now released his tax records. Romney made more than $40 million in 2010 and 2011 and his taxes for both years combined will top $6 million once he files his return in April. Whatever that means for the U.S. presidential campaign one thing is clear – Greece could sure use a few extra tax players like Mike Romney. The Greek government which is still facing a possibility of default has a big problem with tax evasion. That’s why it’s just published a list of some of the worst tax cheats in the country this week. Guardian reporter Helena Smith says it’s part of a larger crackdown on tax evasion in Greece.

Helena Smith: The message is we are here. Tax evasion is going to be cracked down on. It’s not the national sport that it once was. Beware, you will be prosecuted if you go on pursuing this.

Mullins: They have already named and shamed some rather high profile Greek residents on the list. Who are they?

Smith: They include singers, legendary crooner Charlie [indiscernible], sports stars, a basketball star, and a number of high profile businessmen and entrepreneurs – some of whom have already been convicted of fraud.

Mullins: So how much money does the Greek government expect to yield by naming these in some cases high profile Greek residents and trying to get them to pay back taxes?

Smith: The 4,151 individuals that the government has named on this incredible list actually have been shown to owe the Greek state a whopping $22 billion almost in back taxes and the hope is that it will be able to recoup some of those back payments although it has been pointed out by some critics that they move to release this list is slightly symbolic because some of the people named on the list are already behind bars, including an accountant who was convicted of tax fraud now serving several life sentences and was showed to be in hoc to the Greek states to the tune of over $100 million. So it could just be a symbolic move but one that is very important because it shows for the first time ever that a Greek government has the guts to crackdown on a problem that they now see as one of the biggest drains of state revenues.

Mullins: So one of the biggest drains but I wonder and aside from this being a powerful yet symbolic statement, to what extent the money would actually help defray the Greek debt. I mean what kind of figures are we talking about?

Smith: Well Greece’s debt stands at a monumental $360 billion Euros. That’s over 5500 billion – a hell of a lot of money for such a small country. The taxes that are estimated to be owed by these more than 4,000 individuals who have been named and shamed amount to just over $20 billion. So it would make a very small dent in the total debt pile that Greece now faces.

Mullins: Helena, why has it been so easy for so many Greeks to avoid paying taxes?

Smith: That’s the $64 billion question and the answer is actually quite simple. The tax collection mechanism in Greece is outdated, very antiquated, and tax offices in Greece until very recently were uncomputerized. In the course of the past two years since Greece’s debt crisis erupted it has emerged that a lot of tax offices have been rather partial to bribes and corruption themselves so that there’s been a lot of inside jobs within tax offices in Greece and that has, of course, also made the truthful collection of tax a very difficult business.

Mullins: All right. Well, the government is hoping to put that at an end now. Helena Smith with the Guardian newspaper talking to us about the crackdown on tax evaders in Greece. She spoke to us from Athens. Thank you, Helena.

Smith: Thank you.

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