Greece turns eye to tax evaders
Kapeleris Ioannis was getting ready to name names. The villains would be taken by surprise, he said darkly. And then, Greece’s chief financial crimes investigator laughed.
In a country where face matters, unmasking Greece’s most flagrant tax violators is a fearsome threat. Some critics warn that the “naming and shaming” campaign will smear citizens before they’ve been proven guilty of any crimes.
But these are desperate days: Sleepy, sun-washed Greece has become an international symbol of financial malfeasance and big government run amok. And so, in recent days, the finger-pointing began — the Finance Ministry singling out dozens for allegedly swindling the state.
At a time of public fury over slashed retirement benefits, massive layoffs and reduced salaries forced by huge debt, Greeks are in the mood for something radical. And although the government is an easily identifiable target of the rage, there is also deep frustration at the more amorphous idea of wealth and corruption.
There is a sense, on the one hand, that many Greeks have cheated, at least a little — from the grocer who doesn’t hand over a receipt to the conglomerates pumping up their profits by importing goods through dummy offshore companies.
But there is also a palpable indignation, especially among retirees, civil servants and struggling laborers, over having to pay out of pocket for the misdeeds of the more powerful.
“I want to know who they are,” said Dialina Vasiliki, a 53-year-old civil servant in the Defense Ministry, as she strolled along a shaded street of fashionable boutiques. “They should be punished.”
Thanks to recent austerity measures, Vasiliki said, her own retirement benefit will be cut. “I believe we Greeks still haven’t realized what we are facing,” she said wearily.
In the tony suburbs of northern Athens, imposing houses sprawl uphill from the sea. Flowering vines explode over high garden walls; the necks of security cameras crane from doorways and glimpses of the sea flicker between the branches of pines and palms. Many here remain unabashed in their sense of entitlement.
“The whole culture of Greeks is, get as much as you can now, and get away with it,” said Adras Maroudas, a 19-year-old chemistry student from a wealthy neighborhood who loitered with his girlfriend outside one of the gated mansions, seeking shade under the trees from the late afternoon sun. “And this won’t change. It’s deep in the Greek soul.”
Besides, he added, politicians help themselves, so why shouldn’t we?
In these parts, the minions of the moneyed are hauling tarps and tree branches over glistening backyard waters, scrambling to camouflage swimming pools. Under Greek law, swimming pools are luxuries that influence tax status and must be declared; there are hundreds of unreported pools in Athens alone.
But it’s too late to hide them now.
Investigators have already gathered Google Earth images of the entire country and are combing through them, one fancy neighborhood at a time.
“It doesn’t change anything,” Ioannis said. “We already have a photographic map, whether they cover them up now or not.”
His agents have been showing up at the doors of houses with undeclared swimming pools, demanding an explanation.
“They beg us not to name them,” he said smugly.
It’s not just swimming pools. Eager to show a tougher face to a disgusted public, the Greek government is on a crusade. About 30 billion euros is believed to be drifting through the country, off the books and untaxed. The government wants its cash.
Deputy Tourism Minister Angela Gerekou was forced to resign last week after tax authorities revealed that her husband, a film star, owed millions of euros in taxes.
Thanks to updates in the tax law, Ioannis and his vast staff have also been investigating and fining offshore companies. So far this year, they have imposed more than $1.5 billion in fines; that’s compared with about $500 million for the same period last year.
They are also combing through the books of restaurants, bars and hotels, and plan in coming weeks to shutter dozens of Athens nightclubs for underreporting income.
At least one luckless businessman’s name has been leaked to the news media for allegedly failing to pay taxes on dozens of properties. Ioannis resolutely insists that he hasn’t finished investigating the businessman yet, and doesn’t know how reporters ferreted out his identity. Many more will follow, he said.
“It’s about time,” said Paul Mylonas, chief economist of the National Bank of Greece. “If you think you can get away with it, you will; if you’re scared to hell, you won’t. The reality is, very few people in Greece have really been caught and suffered.”
Not all the tax evaders are high rollers. On the contrary, most tend to be white-collar, self-employed professionals such as doctors, lawyers, engineers and architects. Nobody pays them a salary, and so it is easier for them to fudge their income.
This has been a way of life in Greece for years, hardly worth mentioning.
Even so, tolerance seems to be fading. Greeks are informing on their friends and neighbors with unprecedented enthusiasm — there have been hundreds more complaints so far this year than for all of 2009.
“People are angry,” investigator Ioannis said. “They have to know that those evaders are being punished. We’re just showing that we’re actually working here.”
Rampant corruption has left Greeks cynical and resentful, journalist Takis Michas argues. Despite the array of free public services, Greeks still find themselves paying bribes to get what they need from public facilities such as hospitals and schools, he said.
“So he or she quite rightly thinks, ‘Why should I pay taxes?’ ” Michas said. “It’s not that if you pay more, services would improve. No, they would not, because corruption is endemic.”
In a country where the word “politician” has taken on a highly negative taint, many Greeks say they would rather see the investigators turn their attention to the government itself.
“If you don’t have trust with your politicians, how can you be a citizen who feels OK about paying taxes?” said Vassilis Papadopoulis, a sommelier and wine shop owner.