Tue | Oct 23, 2018

Greece mulls levy on undeclared deposits to raise cash

Published:Wednesday | May 27, 2015 | 12:00 AM


Greece is proposing to legalise tax dodgers' undeclared money for a fee, a way to raise money as the country tries to reach a deal with creditors to get more bailout money and avoid default.

Finance Minister Yanis Varoufakis said yesterday he is considering a 15 percent levy on undeclared foreign deposits, and double that rate on undeclared deposits in domestic banks, as an enticement for tax dodgers to legalise their assets.

The idea comes as the cash-strapped country is struggling to complete negotiations with bailout creditors over reforms required for it to get a vital €7.2-billion (US$7.9-billion) rescue loan payment. The new, radical left-led government in Athens says that without the money it can't make a debt payment to the International Monetary Fund on June 5.

Varoufakis insisted that the payment will be made because a deal will be struck by then. "That is my new dogma," he told a press conference, chuckling.




The four-month talks have been slow-moving and at times acrimonious, as both sides have accused each other of intransigence and time-wasting.

Varoufakis said Greek officials were also discussing imposing a small charge on cash withdrawals from bank ATMs and on over-the-counter transactions, to encourage electronic banking and fight widespread tax evasion. But in a sign of how fluid the talks are, Varoufakis' ministry issued a statement shortly after saying the idea of the charges, floated by the creditors, was no longer being considered.

Greece has managed so far to pay its creditors, the IMF, other Eurozone countries and the European Central Bank, as well as pensioners and state employees every month by emptying its cash reserves. It has tapped a special emergency account for IMF payments and forced local authorities, hospitals and universities to make their funds available to the state.