Learn About Illicit Financial Flows
Key Terms

Reporting Corruption in the Greek Tax System

January 2, 2013

By EJ Fagan

EJ Fagan was New Media Coordinator for the FTC from 2011-2013. He is now Deputy Communications Director for Global Financial Integrity. You can follow him on Twitter @ejfagan.

flickr / Aster-oid

We’ve covered Greece quite a bit here on the Task Force blog. Tax evasion and corruption are both endemic in Greece, and they have played no small part in the current financial crisis in both Greece and Europe. Wealthy Greeks have moved significant amounts of money overseas to tax havens like Switzerland.

Tax evasion in Greece was accelerated in part through bribery and corruption in the tax collection system. Websites like IPaidABribe.com have been successful at identifying and tracking bribery in other sectors of the Greek economy, but so far have shown little progress in revealing bribes paid to Greek tax collectors. BBC News has a great story explaining the problem:

Concern about corruption has risen as the Greek economy worsens. Last month, Transparency International’s annual international survey of public perception of corruption found that the situation in Greece has deteriorated further. Greece has slipped from 80th to 94th place in the last year, making it the most corrupt country in Europe in terms of people’s perceptions.

One of the biggest areas of concern is over corruption in the tax system. Tax evasion is known to be endemic in Greece, and is one of the areas the European Commission is pressing the government to improve. One of the latest scandals was over the failure by Greece to investigate the so-called “Lagarde List” of 2,000 Greeks with Swiss bank accounts.

However, there are relatively few cases of tax evasion reported on whistleblowing websites like edosafakelaki. Only 3% of entries here relate to tax. The website’s founder believes this is because bribing a tax inspector is only likely to happen when someone is trying to evade tax, making them unlikely to want to tell people about it, even anonymously. It is an obvious drawback of any self-reporting system.

Read the whole story here. I would be interested to hear of any innovative models of measuring and/or reporting bribery by illegal actors, such as tax evaders looking to move money past tax inspectors.

When it comes to actually tracking money once it crosses a border to tax havens, there is no substitute for automatic exchange of of tax information. Greece is currently in conflict with Switzerland over a small list of names of Greek tax evaders who used Swiss banks to hide their money from the Greek authorities. While this can’t hurt, it represents a piecemeal and inadequate way to track down a problem as widespread and endemic as corruption and tax evasion in Greece. Greece needs to push for automatic exchange with tax havens, at the G20 level.

Attribution Some rights reserved by Aster-oid


Disclaimer: Unless specifically stated to be the views of the Financial Transparency Coalition, the opinions expressed on this blog are solely the opinions of the individual blogger and are not necessarily those of the Financial Transparency Coalition.

Latest Press Releases

European Commission’s Tax Transparency Package keeps tax deals secret

Financial Transparency Coalition · March 18, 2015

The European Commission’s new measures to combat secret tax deals made between multinational companies and governments cannot be called ...

The world can’t afford to exclude developing countries from new anti-tax evasion system

Financial Transparency Coalition · March 16, 2015

BRUSSELS—Weeks after the shocking revelations of wide-spread tax evasion at HSBC’s Swiss branch, a new report from a European Commission expert ...

Leaked HSBC Records Shed Light on Culture of Corruption in the International Banking System

Global Financial Integrity · February 9, 2015

WASHINGTON, DC – Leaked HSBC documents revealed today by the International Consortium of Investigative Journalists (ICIJ) highlight a culture of corruption in the ...