Greeks unhappy over online banking push

Government plans to claw back lost VAT revenues splits opinion in austerity-hit country

Greeks unhappy over online banking push

World Bulletin / News Desk

A Greek government plan to push citizens into online banking to cut down on VAT avoidance is causing confusion in the austerity-hit country.

Astounded Greek taxpayers are waiting in bank lines across the country to apply for compulsory e-banking accounts, debit cards and other kinds of cashless money in order to be entitled to their tax-free threshold.

The government says the measures are to try and recoup an estimated €6.5 billion ($6.9 billion) in lost revenue caused by people paying for services cash-in-hand -- thereby avoiding general sales taxes.

However, many ordinary citizens -- from pensioners to the self-employed and small-business owners -- say this informal economy is the only way of avoiding taxes that they simply cannot afford.

Adding to the unease is a failure to be clear about when the scheme will start. Although Greek lawmakers have approved the plans, the measures have not yet come into force. The lack of a public information campaign has left millions of Greeks at a loss about the future of their personal finances.

It is still unclear what types of expenditure are covered by the scheme -- for example, if payment for medical services is exempt.

The draft law tabled last month says a person with an annual income up to €10,000 will have to spend 10 percent of their annual revenues through this electronic banking, where VAT is unavoidable.

This means that a citizen with an annual income of €5,000 will have to spend at least €500 via cards or e-banking.

For annual incomes up to €30,000 this minimum spend rises to 15 percent and jumps to 20 percent for incomes over €30,000.

If the taxpayer fails to reach the necessary allowance, he or she will pay a fine totaling 22 percent of the difference between the necessary amount of card expenditure and the amount actually achieved.

This new law has left many taxpayers worried and insecure but some economists see it from a different angle.

Güncelleme Tarihi: 14 Ocak 2017, 11:23