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Records in tourism, tax evasion and the black labour market in tourist areas

20 July 2013 / 15:07:29  GRReporter
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In June, Greece marked a record number of tourists. According to early reports of the airports in Heraklion (Crete), Rhodes, Zakynthos and Corfu, at these 4 places alone, there were more than one million tourists. This is 14.7% more compared to June 2012. Crete marked the biggest increase in the number of tourists (19.8%), followed by Rhodes (18.4%), Zakynthos (12.5%) and Corfu (8.2%). Mykonos and Kefalonia also enjoyed a large increase in the number of tourists. Estimates show that 2013 will be a record year, since it is expected that the number of tourists will exceed 17 million in the summer. This is partly due to the events in Egypt and Turkey.

According to The Guardian, the number of tourists on large cruise ships coming from the USA increased by 40%. In addition, travel agents sold more than 1 million tickets to Greece. The number of Russian tourists is expected to reach 1.2 million – a 230% increase compared to last year. This increase is so great that the Association of Greek Tourism Enterprises hired 20 extra employees who will help with visa issuance. According to Chairman of the Association Andreas Andreadis, the increase in the number of Russian tourists is due to the lifting of restrictions on issuance of visas. Bookings from Germany also increased - about 15%. According to the Guardian, this is due to the appeal of Chancellor Angela Merkel to her compatriots to visit Greece. And Lufthansa German Airlines chose Athens for the first flight of the biggest aircraft in the world - Boeing 747-8.

Along with the record increase in the number of tourists, tax revenues from tourism activities also marked record levels. Rhodes may be known as the "Island of the Knights", but local travel companies are far from exhibiting "knightly" behaviour as taxpayers. According to the Office for Combating Economic Crimes (OCEC), checks on tourist regions in the summer (made in the period 15 June to 15 July) show that Rhodes ranks first in the list with the greatest number of violations of tax laws.

In particular, 1,088 tourism services companies were checked – bars and restaurants, companies servicing beaches, water sports firms, nightlife centres, hotels, and rooms for rent. On the Island of Rhodes, violations amounted to 84.62%. I.e., 8 out of ten companies on the island evaded taxes in one way or another, and this happened despite the fact that Rhodes is one of the most popular tourist destinations in Greece and as such benefits the most from this year's record increase in the number of tourists from abroad.

Zakynthos, where the percentage of offenders was 80%, ranks second in this list, followed by Santorini - 77.14%. Besides Santorini, other Cycladic islands also recorded a high percentage of offenders, too. Tinos (72.73%), Paros (68.18%) and Syros (57.9%) topped OCEC’s list.

Across the country, a total of 538 companies-violators were discovered, with 2,473 offences in total. After the respective prosecutor’s order, OCEC paid particular attention to the control of luxury complexes. The findings were downright apocalyptic. Much higher construction costs and much lower rents than the actual were declared, and electricity bills were registered on small farm houses. There are also cases in which tourist activities were not declared. Checks were carried out at more than 50 luxury homes. A travel agency that committed 17 violations is a very typical example. It rented out luxury homes over the Internet without declaring incomes to local tax authorities.

Besides the violations mentioned so far, inspectors found 1,680 employees without insurance – out of a total of 4,818 employees checked in 1,345 tourism companies (taverns, bars, night centres, hotels, water sports companies, travel agencies, etc.) in various regions of the country. I.e., one out of every three employees was without insurance at the time of the inspection. Furthermore, this is happening at a time when a subsidy programme of 10,000 jobs in the tourism industry is in effect. According to OCEC’s information, fines amounted to 995,000 euro.

Tags: tourism records tax evasion Rhodes Zakynthos Santorini
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