Debt-ridden Greece gets tough on its tax dodgers

THE Greek government yesterday threatened to punish tax dodgers by confiscating and auctioning off their luxury properties on popular Aegean islands as part of measures to deal with the country's debt crisis.

Finance ministry checks showed 990 people who owed more than 6.7 million euros in taxes owned a total of 2,917 real estate assets on the scenic islands of Mykonos and Santorini, worth more than 288 million euros. The ministry gave tax dodgers until July 20 to settle their debts.

"After this deadline, there will be urgent procedures of forced payment, including auctions," it said in a statement.

Greece has pledged to improve its dismal tax collection record as part of a mammoth 110-billion euro bailout by the European Union and the International Monetary Fund.

Tax evasion, particularly by well-off citizens such as doctors and lawyers, is rampant in Greece. Estimates on the size of the shadow economy range between 10 to 30 per cent of GDP.

Cracking down on tax evasion also is seen as a key factor to win public support as belt-tightening measures bite.

In the first such move in eight years, tax authorities ordered the temporary closure yesterday of ten restaurants and night clubs which had not been issuing receipts to customers, the ministry said.

Fines imposed on businesses and households for tax code violations rose sharply after the finance ministry sent more tax-men on the beat for inspections.

The total amount of fines rose to 1.83 billion euros from 895 million euros in the same period last year, the statement added.

In the past, however, many tax offenders managed to have these payments cancelled or delayed for years in the courts.