Irini* is an esthetician. She lost her job at an upmarket salon when it closed down abruptly. The owner, a shady entrepreneur with fingers in a lot of pies, had declared bankruptcy and was subsequently arrested for tax evasion. That was three years ago, and she is still owed a few months salary. Irini found another job immediately, but only part-time. She supplements her meager salary by offering facials at home. She gets paid in cash. She would dearly love to start a little business with a friend, but has yet to find a way to make it affordable.
Roula* is a masseuse, earning good money making house calls (as much as €1,000/week, on good weeks.) She has tried many times to start a proper business, because she wants to be able to declare a steady income so that she can ask for a bank loan in order to buy an apartment. This is unaffordable with the present laws, since she would need to invest a large sum to set up her own space. A sum she does not have. She is a single mother with a son to support, so she has been forced to take a part-time job where she is paid a lot less per hour, just so that she can qualify for some social security.
Myrna* opened a tiny cake shop in an affluent Athens suburb, investing a lot of her own money. Three years later, and although she has acquired a loyal clientèle and as much work as she can manage, if not more, she is still not making a profit. And yet she has to pay a lot of taxes. She might have to close down.
If people like these were given incentives in starting and running small businesses, they could each pay a few thousand in taxes yearly. One million people times one thousand in tax a year? Do the math. The state would get a cool billion, where now it gets nothing. In France, for example, if you have a ‘micro-enterprise’ declaring up to €23,000, you pay around €5,000 in tax. Again, do the math.
There are A LOT of such people in Greece. Proper laws would help with tax evasion, and with unemployment. Instead, thousands of small companies have been forced out of business, and the black economy is thriving. The capital controls, which – despite promises – are still enforced, are not helping the situation.
And another thing, it’s not very easy to make a budget when the laws change every two minutes, and some taxes are applied retroactively.
In another surreal twist, Manolis*, who is a farrier, was preparing his tax declaration form, when he was astonished to discover that the profession of farrier had been struck off the list! Unable to decide how to fill in the form, he went to the tax office where a harassed employee had no idea what he was talking about. He asked to see the person in charge, and was directed to an office where a man lounged behind a desk, drinking coffee.
‘Well, just put the profession closest to yours,’ the man told him, totally uninterested.
‘I shoe horses! So, what shall I put? Cobbler? Ironmonger?’ Manolis was both sarcastic and indignant.
The man looked at him.
‘Did we summon you here?’ he asked.
‘No. I came because I need to know what to do with my tax form.’
‘Oh, for god’s sake, man, what’s your problem? Just put what you like, don’t waste my time.’
Anestis* is a physiotherapist. A lot of his patients are covered by social security, which means they don’t pay him directly – he subsequently gets paid by the state. However, a law came out reducing the price of each treatment retroactively from €15 to €12 (effective since 2012.) In May, he was paid for 2014 – but, of €45,000 he was owed, he only got €15,000. He still has not received the rest, and has no idea when and if he will get any of it. He seems resigned to the fact that it will certainly not be the whole amount. Meanwhile, he’s had to pay €30,000 in taxes – the tax people having refused to offset his credit against his debt.
Now for the flip side of the coin. Something Greeks seem unable to understand is that ‘the State’ is not an abstract entity that gets its money from a higher deity. Cheating the government is cheating your family and neighbors, those who do pay. But people still admire a friend or colleague who’s found a clever way of getting around some taxes, refusing to understand that it’s their own taxes that will pay for the shortfall.
Nobody likes paying taxes. But paying taxes is more painful if you feel the government is robbing you, or if you feel you’re not getting anything in return (roads, schools, etc.). A change in mentality is desperately needed – on both sides.