Photographer: Matthew Lloyd/Bloomberg

Greece Asks Citizens to Bring Home Foreign Cash

  • Deputy Finance Minister Tryfon Alexiadis speaks in interview
  • Bill to scrap some fines for undeclared incomes held abroad

Greece is asking its citizens to bring home funds stashed away in Swiss and other overseas accounts with promises of a partial amnesty.

As the government struggles to fix the country’s battered banking system and increase tax revenue, it is ironing out a law providing incentives for voluntarily disclosing undeclared overseas financial assets. The legislation would scrap fines and some surcharges for such disclosures. While not providing full amnesty, incentives may also include dropping criminal charges, Deputy Finance Minister Tryfon Alexiadis said in an interview in Athens on Wednesday. The draft bill is being negotiated with creditors and may be submitted soon to parliament, he said.

“We won’t be forgiving everything, but we will give incentives so that people participate,” Alexiadis said, adding that disclosed assets will be taxed at the rate that was in place when the income was made. “If someone had declared an income of, say, 200,000 euros in a particular year, but has deposited 500,000 euros, then they would have to cover the difference. Proposals for a 10-15 percent taxation aren’t serious, the rate will be higher.”

As Athens braces for yet another round of austerity measures attached to its euro-area-backed bailout, tax evasion and illicit trade are shrinking state coffers by between 15 and 20 billion euros a year ($17-$22 billion), Alexiadis cited estimates as showing. The country is also looking to bolster its lenders after doubts about Greece’s place in the euro area led savers to withdraw almost half of all bank deposits since the beginning of the crisis, with much of the funds transferred offshore.

Lagarde List

According to Alexiadis, Greece has imposed fines totaling over 200 million euros to date on alleged tax evaders on the so-called Lagarde list, a spreadsheet containing holders of bank accounts at an HSBC branch in Geneva. The list was named after former French Finance Minister and the current head of the International Monetary Fund Christine Lagarde, who handed it over to the Greek government in 2010. Alexiadis said that authorities are currently investigating 1.3 million tax registers. The checks are the product of “combining all existing lists,” flagged by competent authorities, Alexiadis said.

Although tax evasion is still rife, revenue collection this year is within budget targets, according to Alexiadis. The government will increase income tax and taxes on revenue from rent, as agreed with creditors last summer, he said. The minister declined to say what other tax hikes the government is mulling to meet fiscal targets in its latest bailout, or comment on reports about plans for a levy on bank transactions.

Going Well

“We are negotiating hard, and things are going well,” he said ahead of a new round of talks with officials representing the European Central Bank, the European Stability Mechanism, the European Commission and the IMF next week.

“There will be some measures which will burden some taxpayers, because we need to cover a fiscal gap,” Alexiadis said. “I don’t understand those who criticize the government for implementing the measures included in the agreement with creditors, while at the same time accepting this agreement.”

Both Greece and its euro-area partners have said they aim to conclude negotiations on the pending bailout review this month. Asked whether Greece can stay afloat if this self-imposed deadline is missed, Alexiadis said that the government has no immediate cash flow problem. 

“You will hear scaremongering, as happened before,” he said. “But there wasn’t a problem then, and there won’t be a problem now.”

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