Reducing of VAT gap could bring additional 2 billion euros annually, says Finance Ministry

Finance ministry sources said on Tuesday that “reduction of VAT gap could bring additional 2 billion euros annually.”

Speaking to state-run news agency amna, the finance ministry sources said that measures designed to combat tax evasion, which are currently in the implementation stage or have already been implemented, will lead to the discovery of undeclared incomes.

These measures include, among others, the linking of POS terminals with cash machines, pre-filled VAT and income statements based only on income/expenses recorded in the MyDATA system, expanding the use of POS terminals throughout the market and changes in the taxation of the self-employed.

The VAT gap in Greece was 23.4% in 2019, according to Commission figures, falling to 19.7% a year later and is estimated to be roughly 15% currently. Based on these calculations, this reduction by 8.4 percentage points offers an annual revenue of 2.5 billion euros, of which 2.0 billion is derived from VAT and 500 million from higher corporate tax income.

The finance ministry aims to bring this VAT gap down further, converging with the European average of 9%, which means an additional 2.0 billion euros in public revenue per year. amna noted.

The 2024 draft budget does not envisage any additional revenue from combatting tax evasion. VAT revenue is projected to total 24.2 billion euros in 2024 from 23.1 billion this year.

Based on the European Commission’s latest data, Greece was among the four EU member-states with the best performance in reducing VAT gap, after Hungary, Germany and Holland.