Archive for Income Tax

To Beat Austerity Measures, Pay Your Taxes

Posted in Benefits, Budget Cuts, Europe, Government Spending, Spain with tags , , , , , on 22/02/2013 by floroy1942

The people in both Spain and Greece have made it known they are fed up with their governments austerity measures, but in part, they are the ones making them necessary. The number of tax dodgers is rising day by day, and that fact alone means governments are not getting the money they need to get the economy back on its feet.

More People Want Cash Transactions

More People Want Cash Transactions

I can talk from personal experience here in Spain, because when someone does something for you here they invariably ask for cash instead of a card payment or bank transfer. Why? Because a cash payment does not go through the bank and is therefore not recorded, hence they do not have to pay tax on it. Even some shops will only take cash now as the economic squeeze bites. Many big businesses are not paying the level of taxation they should, and this too is hurting the economy.

Falling House Prices In Spain

Building Boom Collapse

The government is hemorrhaging money to keep the economy afloat and the ever-increasing number of tax dodgers only makes the situation worse.  Both the Spanish and Greek governments are struggling to pay social security and unemployment benefit to those who need it, and the number of unemployed is rising daily, which only increases the load.

With prices rising, pensions and benefits being cut, people are looking for any way possible to make ends meet and the most obvious is to avoid paying taxes. It is a cycle for destruction of the entire economy and both countries are heading into the abyss.

A Comparison Of Tax Evasion By Country

A Comparison Of Tax Evasion By Country

The Greeks have always avoided paying the proper level of taxes on a massive scale, and that is the main reason for the breakdown of their economy in the first place. Spain is now going down the same road. I do not blame just the people, for the governments of both countries need to get their spending priorities right and make the paying of taxes fair across the whole population.

The Greek Rich Are Moving Their Money Overseas

The Greek Rich Are Moving Their Money Overseas

Many super rich in Greece have not paid taxes for decades because they were bringing investment and money into the country, and the ordinary people had to carry the load, although most of them avoided paying their full share through corrupt tax officials. In the last few years the rich have been moving their capital out of the country to off-shore accounts to avoid heavy tax bills. Many of them have so much money they could probably settle the Greek debt on their own. It’s the old story; if you are rich you can easily move your money around, unlike the man in the street.

Unfinished Apartments Due To The Building Trade Collapse

Unfinished Apartments Due To The Building Trade Collapse

The big problem with Spain, unlike Greece, is that the catalyst for this current debacle was that everyone put ‘all their eggs in one basket’, i.e. the building industry. The collapse of the banks, coupled with the massive fall in property prices and the related stagnation of the building trade put Spain on the road to economic collapse.

Keeping Out The Stench Of Corruption

Keeping Out The Stench Of Corruption

Corruption has also cost the economy dear with just about anyone in a responsible position taking bribes and in some cases, skimming money. The April 7 2006 arrest of practically the entire local council of Marbella on corruption charges is a prime example. Recent allegations of corruption have even been made by the press against the current Spanish Prime Minister, Mariano Rahoy and his Party, although it is not for me to speculate on whether they are true or not. Since that time Rahoy has stated that he will crack down on corrupt practices in both national and local government, but that is hard to do when most people are at it. I wish him luck.


And Still The Greeks Avoid Taxes!

Posted in Budget Cuts, Europe, Government Spending, Modern World with tags , , , , , , on 08/06/2012 by floroy1942

It would seem some people never learn, for even when they end up to their necks in the mire through their own stupidity and greed, and with their country on the verge of total bankruptcy, they continue to make the same mistakes. I am of course referring to the Greek habit of not paying their taxes, which is the main cause for the massive debt they are now suffering.

In my 23/10/2011 post The Shocking Truth Behind the Greek Debt, I explained why the Greek people ended up in a crisis that has shaken the very foundations of Europe, and yet the latest news is that nothing has changed.

She Tells It As It Is!

It bugs me somewhat to think that the Greek people were very angry at the remark made by IMF head Christine Lagarde when she said the Greeks were avoiding paying taxes. Indignation was rife and she received many angry complaints, but the simple truth is – she spoke the truth!

For decades, very few people in Greek society have paid the level of taxes they should, in fact the rich have not paid any at all, and the latest estimate is that the country will run out of money completely by the end of July!

An Economy Based On Deceit

Government officials are now scrambling for ideas in an effort to collect taxes from people, but some just haven’t got the money, and many businesses are using ‘cash only’ methods in an effort to forestall paying taxes on their income. Despite the recent bailout of 130 billion, the government still faces a shortfall of 1.7 billion because tax revenue and other sources of potential income cannot be collected.  Nikos Maitos, an official in Greece’s financial crimes investigation unit said, “One repercussion of the crisis is that people are harder to find, and when you do find them, they don’t have money.” Harry Theoharis, a senior official in the Greek Finance Ministry is quoted as saying, “You can’t flog a dead horse”.

The government has stated that it is owed a total of €45 billion in back taxes and the outlook is that only a fraction of that will ever be recovered.

Paperwork Chaos

According to reports, the Greek government has begun enforcing a 1995 law that allows tax inspectors access to the bank accounts of suspected tax evaders. The banks however have so far obstructed 5,000 requests for information since 2010, and are delaying the hand-over of other documents by up to 10 months, and then dumping such a huge pile onto the tax department that trying to get the necessary information is next to impossible. So, you see, considering the whole European financial mess started with the banks in  2008, they too have not learnt any lessons in Greece.

To add to the country’s woes, the rich are moving their capital out of the country as fast as they can, for they too are ducking paying tax on the largest proportion of their wealth, which is a bit sick considering before the current crisis they never paid any at all! 

The Underground ‘Honesty’ Barrier

Among the people there is anger that salaries have been cut by as much as 50% due to the austerity measures, but if you read my last post on the subject, you will realise that the salaries earned before the crisis were out of all proportion with the rest of the world. Cleaners employed by the Greek Rail Company earning €60,000 a year, and on top of that, no-one buys a subway ticket in Athens because there are no controls, meaning millions travel for free every month. 

Any country run on these lines is doomed to irrevocable failure, and from all accounts, the crunch is going to come soon. The sad thing is, when it does come it will likely drag the rest of the continent down with it, and eventually we will all suffer. Whether the Euro will survive this is without doubt questionable. Greed will eventually be the undoing of man!


For those interested, the following link will take you to my previous post on this subject:


The Shocking Truth Behind The Greek Debt

Posted in Britain, Budget Cuts, Europe, Modern World with tags , , , , on 23/10/2011 by floroy1942

If I had not been able to verify it for myself, I would never have believed the contents of an e-mail a friend sent me on the current Greek debt crisis. It left me totally ‘gob-smacked’ for want of a better description.

A Symbol of Out of Control Excess

These little known facts have led me to fully understand why the Greek people are out on perpetual strike at the measures the government is taking to try and ‘balance the books’. The truth is, the world has never seen so many ‘free-loaders’ and tax cheats living in a single country in all its long history. In Greece, more than 75% of the population are on the fiddle in one way or another.

Athens Underground 'Honesty' Ticket Barriers

For example, The EU paid Greece £1.8billion to finance the underground system in the capitol city Athens in preparation for the 2004 Olympic Games. Since that time, the 5 million Athenians ride this ‘state-of-the-art’, air-conditioned system for free because there are no access barriers, relying on people’s ‘honesty’ to validate their tickets. As you would expect, no-one bothers to even buy a ticket! 

Athens Underground System: 

Bankrupt Rail System

The problems are not only limited to the underground system however. There is also scandal enough in the above-ground rail system. It has been revealed that salaries within the state-owned rail system are so ridiculously high that it is losing £2.6million a day! The annual wage bill for the company is £500million a year, while the annual takings are only £80million from ticket sales.

€60,000 A Year For This?

The reason for this disparity, is that the average take-home salary of those employed on the bankrupt rail system is £60,000 a year, track workers and lowly cleaners included. Can you even begin to comprehend such extravagance??? One Greek politician is quoted as saying: “It would be cheaper to put all the passengers in taxis”.

In the last decade, the public sector wage bill has doubled in Greece as a result of ‘Union power’. As an example, the Greek education system has four times the number of teachers it needs, and the majority seem to spend their time on paid sick leave. Not only that, another thorn in the flesh of Greek politicians at the moment is the pension rights of so many of its citizens.

Arduous? Perilous?

Unbelievable as it may seem, if you are a pastry chef, radio announcer, masseur or hairdresser, which are among 600 privileged professions, you retire at the age of 50 with a 95% pension. Why? Because your job is considered arduous and perilous! Have you ever heard anything so incredulous? This is one of the many reasons why Greece as a country is totally bankrupt. 

Greece’s troubles do not end here however. The government is also fighting tax evasion on a nationwide scale. Literally everyone is at it. Most families just give their income as ‘below’ the £10,000  a year threshold, and if it is questioned, they pay a bribe (or ‘Fakelaki’), and are taxed on that figure. Almost all families estimate to pay at least £2,000 a year in ‘fakelaki’s’.

Kifissia -Lush Athens Suburb

The biggest tax dodgers of all are, not surprisingly, those who should pay the most i.e. the Greek rich. In the affluent suburb of Athens where they all live, the richest people in the country are…you will not believe this….allowed to ‘state their own earnings’. It doesn’t take any stretch of the imagination to realise they pay a tiny fraction of the tax due the government.

A Man With a Hopeless Mission?

The Greek Prime Minister George Papandreou, estimates that tax fraud in this sector alone is costing the government over £40billion a year. The system is so corrupt, and with so many inspectors taking bribes, that the figure could be much higher.

Greek shipping magnets, the richest men in the country,  live totally tax-free because of the ‘huge wealth they bring into the country’, this despite the fact that the once mighty Greek shipyards, which once employed 15,000 workers are in reality, practically idle and employ a mere 500 workers today. As part of a crackdown, George Papandreou called for a tax on swimming pools, and it’s not surprising that only 300 of the people living in this rich area have declared they own one, when it is estimated the true figure is around 20,000. Papandreou began helicopter hunts for ‘illegal’ swimming pools, which prompted a rush on sales of tarpaulins by the rich to hide them from the air.

Now that a crackdown has begun, money is pouring out of Greece to overseas bank accounts in Lichtenstein, The Bahamas and Cyprus in an effort to cheat the system. A doctor, who declares an income of £90,000 a year, but admits he earns five times that amount, has been quoted as saying that many of the rich are setting up dummy companies or buying property abroad to dodge paying the tax they owe.

The Eurozone

Although Greece had to wait two years for entry into the Euro Zone because they could not meet the financial requirements, they falsified the books and finally joined in 2001. Since that time the EU has poured money into the country, which has fostered an even greater lack of fiscal responsibility.

A Policeman is Set Alight During a Riot

Now the ‘cat is out of the bag’, the government is trying to put an end to the irresponsible excesses of the past, but naturally the people are up in arms about it. This is why the country is being torn apart by strikes and riots at the moment, and it does not look like it will end soon.

The government has been bailed out by the other EU countries twice now to avoid bankruptcy, but the story is far from over. The second payment of €100billion about to be made, is estimated by many analysts to only be enough to repay the interest on the debt incurred with the first loan, which means in effect that Greece could again be bankrupt within two years. The sad thing is, the out of control excesses of Greece could lead the rest of the world into an economic crisis such as the world has never seen.

Says It All!

Until the Greek people learn that their current ‘Utopian Lifestyle’ is unsustainable and they must start paying, the situation will not improve. To be honest, I have grave doubts this entire saga will reach a happy conclusion.


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