Tourist Taxes

The Greek finance minister, Yanis Varoufakis, is under pressure for his government's proposal to clamp down on tax evasion by using amateur spies to report on business owners who fail to issue receipts for goods and services rendered.

Now 'dinero negro' is a big problem in many countries across Europe, but I can't really see that this proposal is anything more than a ridiculous gimmick.

Having won the election on a populist opposition platform, Syriza is now finding out that governing a country is a serious business, for grown-ups not student politicians.  

Varoufakis mocked over ‘tourist tax spies’


Yanis Varoufakis, right, succeeded Gikas Hardouvelis as finance minister. Both men were making headlines yesterday Getty Images

By Anthee Carassava - The Times

The new Greek finance minister was facing calls to quit yesterday, with critics accusing him of turning the country into an international laughing stock.

Hours before Yanis Varoufakis was due to discuss reform measures with European creditors to persuade them to continue paying rescue loans to keep Greece afloat, the opposition conservative party called for him to go, arguing that his policies — in particular, a proposal to use tourists to clamp down on tax evaders — were risible.

The plan to arm tourists, housewives and students with spy cameras while they posed as shoppers to see if they were given receipts was one of seven measures that Mr Varoufakis sent to the head of the Eurogroup to explain how the Greek government planned to improve its tax collection efforts.

In his 11-page report to creditors, Mr Varoufakis said that the findings of the amateur spies would be “collected immediately by tax authorities who would then issue penalties and sanctions”.

The proposal has been widely ridiculed in Greece, and lawyers have said that it could face legal challenges. Opponents said that it went against a deeply ingrained “anti-snitching” culture.

Kyriakos Mitsotakis, the conservative whip in Greece’s 300-seat parliament, said that Mr Varoufakis’s policies were “dangerous” and called for him to stand down.

“He has become unstoppable and impetuous, shooting from the mouth and conducting anything but dignified negotiations,” Mr Mitsotakis told reporters.

“Mr Varoufakis has no idea what he’s talking about anymore. Greece has become isolated. His proposals range between being unclear to ridiculous, provoking laughter and ridicule when talking about wiring up tourists to crack down on tax evasion.”

Alexis Tsipras, the prime minister, had earlier appeared to distance himself from his finance minister, saying that he wanted “more action and less words”.

Last night, Mr Varoufakis, whose predilection for open-necked, untucked shirts has made him an instantly recognisable figure among the soberly attired ranks of European finance ministers, was discussing his proposals with his counterparts in Brussels.

They need to approve the measures before they agree to disburse a tranche of bailout funds, but Jeroen Dijsselbloem, the Dutchman who heads the meetings of eurozone finance ministers known as the Eurogroup, said that the Greek proposals were “far from complete”.

Mr Varoufakis has upped the ante by threatening to a hold a referendum on Greece’s financial future, or to push the country to an early election.

However controversial, the taxspying scheme, government officials say, signals the administration’s resolve to crack down on widespread evasion which deprives the country of billions of euros a year.

Mr Varoufakis’s predecessor, Gikas Hardouvelis, was also in the headlines yesterday — forced to defend his actions after it emerged that he had sent $500,000 of his own money abroad to foreign bank accounts at the height of the country’s financial crisis in 2012.

A former banker, Mr Hardouvelis served as finance minister between June 2014 and January this year.

He denied wrongdoing, saying that he had merely wanted to secure his savings, as he was worried about Greece’s financial plight. “I transferred the money in small sums,” he said. “I was concerned about the situation then, more so than today.”

Mr Hardouvelis said that the money had been accounted for, and was declared and taxed. Even so, critics said that the money transfers were morally repugnant, and a potential conflict of interest at a time when he should have been working to shore up the country’s finances.

“When you are finance minister and your country is bleeding with capital outflows because of the prevailing uncertainty, it’s your moral obligation to keep your money in the country to instil faith, not to wire it abroad to a safe, foreign account,” said Yannis Theoharis, an opposition MP.