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Corruption rips Greek tax offices

04 January 2012 / 17:01:56  GRReporter
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The Greek Administrative Court established a new case of corruption in the capital tax office, which has deprived the country of hundreds of thousands of Euros. The corruption scheme was formed after the last tax amnesty, which the government of George Papandreou established at the end of 2010. With it the government allowed entrepreneurs to remit any old sins to the Treasury by paying an amount calculated on the basis of the average turnover of the company for 10 years and a fixed rate. If companies or sole traders decide that they have nothing to hide then they do not pay the amount determined for tax amnesty and are subject to tax audit.

Many entrepreneurs were quick to pay the requested amount in order not to have dealings with the tax authorities. Some decided not to succumb to the desperate measures of the government to collect pennies in the treasury and refused to pay. And others just knew that they have nothing to worry about in case of tax audit. Many enterprises, however, decided not to risk it and allow tax authorities to dig into their old books, so they rushed to pay what was requested. Some employees of the control services were able to benefit from the process and for a certain amount under the table they have significantly reduced some obligations set by the tax amnesty or fines.

The case revealed by the Administrative Court indicates that employees of the control services have reduced the amount of fine of a company from 620,000 Euros to 20,000 Euros. According to documentation provided by the Ministry of Finance the amount arising from the tax amnesty was 420,000 Euros. Tax office employees have influenced the electronic Taxis system and have changed the data to state that the amount due is only 20,000 Euros and that they were paid off. After checking and with the additional penalties on the amount the mentioned company owes 620,000 Euros.

An example of how individuals can get around the law no matter how much money they owe to the state is the story of 66-year-old Anastasios Kiologlou. Today Greek media reported that the businessman, who owes 20 million Euros in taxes, was detained by the police. He asked for adjournment of the trial and his plea was approved. Kiologlou owns a sanitary equipment company and also Aris basketball team from Thessaloniki. He is an old acquaintance of the court of justice, because his name was involved in some corruption scandals from which he got off with relatively minor damage.

Several years ago tax authorities established that there are problems in his company’s accounting books. In 2002 he and his children were brought to court for issuing fictitious invoices. The verdict came in 2005 and stated several years in prison with a right of appeal. Kiologlou decided that there was a way to get out of this situation unharmed. He decided to bribe the three supervisors who conducted the inspection in the company. They were supposed to change their initial testimony with a new one that would be more convenient for him and his sons, and would reduce the severity of the sentences. They demanded 30,000 Euros for the "favour". Kiologlou went to the police from where they gave him marked money. Two of the three tax authorities were arrested holding the marked money and sentenced by fast track. Six years later, the businessman has gathered new sins on his back and will again give explanation to the court. This time, the amount accumulated is 20 million Euros in unpaid taxes and no one noticed the problem even after the first million.

Illegal fuel trade is also taking on significant proportions in Greece. Anonymous sources from the Ministry of Development and Competitiveness said for Ethnos newspaper that customs officers, tax offices, the Ministry of Finance and wholesalers have created a major mechanism, which prevents the creation of a system for monitoring fuel trade. Each year from smuggling in fuel trade the state loses between 500 million and one billion Euros, and traders who operate in the shadows of the underground economy in this sector have between four and five billion Euros turnover annually. According to ministry sources, those involved in the illegal trade in fuels are often higher standing officials from police departments in large Greek municipality.

Tags: Tax audit tax evasion Greece smuggling fuel
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