Tax evasion has emerged as a major problem in the Greek debt crisis, with new reports estimating as much as 5 billion euros lost annually to dodging. Certainly the recovery of those dollars can only atone for a small portion of the 54 billion Euros needed by Greece for 2010; however, they are certain to contribute to the depth and severity of the cuts made for the coming year.
The amount of lost tax dollars is equal to the sum looking to be raised by Greece's proposed 10-year bond issue. Despite respectable annual economic growth, Greece’s tax collection has been less successful than that of its neighbors. Taxes account for nearly 8 percent of the GDP for most EU nation’s as compared with Greece’s 4.7 percent.
Tax revenue’s percentage in the GDP slipped by 2.5 prercent between 2000 and 2007 despite economic expansion in the range of 4.1 percent annually. Rather than admit their role in the debacle Greece tax collectors went on strike last week.
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