Greece has announced a tax amnesty to collect tax revenue.
And it has been widely condemned.
Greece has a massive shadow economy — about 29.5% according to the World Bank.
I fear this amnesty won’t really hit that. It may even make it worse as these things become habitual.
What’s really needed is automatic information exchange so that Greece can find out who has accounts abroad — and then track them. Only that will ensure Greece can tackle the massive tax gap it faces — a gap that is bringing the country to its knees.
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Richard
You are quite right, but you are assuming that the wealthy Greeks are holding their accounts in the EU. Automatic exchange of information in Europe will achieve nothing in respect of undeclared wealth hidden in the Bahamas, Panama, Singapore, Hong Kong and Dubai – those are the big shipping jurisdictions and are the jurisdictions used most by the wealthy Greek shipping community. How do you proposed to access information from there?
@Rupert
Sanctions
Richard
If only if it were that simple…
Hong Kong is part of China. The West wouldn’t dare to impose sanctions on Hong Kong. Dubai is part of the UAE – big oil reserves – no chance of sanctions. Panama managed to get off several major US tax blacklists by threatening to exclude US contractors from tendering for major Panama Canal widening contracts if they were on the lists. They wouldn’t hesitate to do likewise for EU contractors if sanctions were introduced. Bahamas and Singapore are in a weaker position, and probably the threat of sanctions against Singapore is crucial to plug the huge EU leaks in that particular bucket.
Rupert, do you really think EU sanctions would effect Singapore?
The Greeks would surely be better off just trying to bribe some bank workers in the jurisdications you mention for account details.
Greg
It may do – I speak regularly to Singapore lawyers and they are anxious that Singapore doesn’t become a pariah in the offshore banking world. They neither need nor want huge volumes of dodgy European business but the Swiss bank operations out there are going hell for leather moving European business ti the region and it’s very hard to stop it.