Around 1,000 Small Businesses Busted For Circumventing Greek Taxes

Greece’s economy has been under pressure, and now, a bunch of the country’s small businesses are in trouble with Greek authorities.

According to a report, Greek authorities said they arrested 24 people as part of a crackdown on roughly 1,000 small businesses that conducted cashless transactions without paying taxes on them. A large swath of the businesses were in the tourism industry, where they used point-of-sale devices linked to Bulgaria, via Malta, to process transactions that weren’t recorded in Greece. That meant small businesses didn’t have to pay taxes on those transactions.

“We arrested 24 people who were using POS machines connected with banks outside Greece, in Bulgaria and Malta, to evade tax,” Emmanuel Ploumis, head of the Greek police’s economic crime squad, told reporters, according to a Reuters report. “That’s illegal according to the capital control rules. The PoS should be connected only with Greek banks.”

Capital controls were instituted by the Greek government at the end of June 2015 to prevent people from withdrawing all their money from Greek banks and crashing the entire banking system. Under the rules, businesses can only export money to pay vendors. They need permission from the government and central bank to do so.

Ploumis told reporters that Greek authorities discovered 971 companies that were equipped with a combined 1,195 point-of-sale devices processing transactions in which the proceeds were found in Bulgaria. The businesses evaded a 24 percent value-added tax that the businesses have to pay to Greece. The law enforcement agent also said the small businesses were able to withdraw as much as €2,000 each day from the Bulgarian bank via an ATM in Athens, despite the fact that every other Greek could only withdraw €840 euros every 15 days. Tax evasion in Greece is a big problem and accounts for up to 32 percent of state revenue.


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