December 14, 2011
Greek tax collectors routinely pocket 40 per cent of fines imposed in disputed tax cases in return for lowering the penalties paid by miscreants, a former senior Greek finance ministry official has revealed.
Diomidis Spinellis said a standard scale is used at more than 250 tax offices across Greece to handle settlements with wealthy individuals, family-owned companies and self-employed professionals – seen as the country’s biggest tax evaders.
The long-established practice is known as the “40-40-20 deal”, he said.
The tax evader receives a discount of 40 per cent on the agreed fine, while the tax official takes another 40 per cent – effectively a bribe. The state receives only the remaining 20 per cent, he said.
Greece loses revenues of €5bn-€6bn annually because of tax evasion, equivalent to 2.5 to 3 percentage points of gross domestic product – more than any other eurozone member, according to the Paris-based Organisation for Economic Co-operation and Development.
Mr Spinellis made the disclosure at a public discussion on tax evasion organised by two Greek think-tanks, an Athens consultancy and a civil society group. He resigned in October as head of information systems at the finance ministry after senior tax officials failed to act on information revealed by new computer programmes that he had developed to detect tax evasion.