Overtaxation led to tax evasion

Losses incurred by the state coffers due to tax evasion in 2014-17 were greater than the value-added tax revenue increase as a result of consecutive tax hikes, according to a European Commission report on the so-called VAT deficit (the difference between the expected VAT revenues and actual collections).

In that period VAT revenues increased by about 2 billion euros (from 12.6 billion to 14.6 billion euros per year), but the VAT deficit soared by almost 3 billion euros, from 4.6 billion to 7.4 billion euros.

The report shows that the period of the financial crisis in Greece constituted a greenhouse for tax evasion, with the last few years of excessive taxation aggravating the problem and placing Greece second from bottom among the European states, and only above Romania.

The VAT deficit constituted 31 percent of the anticipated revenues from VAT in 2016 and 33...