The profile of the person most likely to commit tax evasion is a wealthy doctor with a private practice who resides in rural areas in southern Greece, is married and has many children, a study on the issue by Ernst & Young showed, with total tax evasion estimated at 6-9 pct of GDP.
The study, based on an analysis of income declarations from 2004-2005, was presented at an event on fighting tax evasion organized by the Hellenic Federation of Enterprises (SEV) and Research and Policy Institute “diaNEOsis” and includes a breakdown of the data based on the profession, the place of residence, the family status etc.
According to the study, the percentage of undeclared income for the self-employed professionals is estimated at 57 pct to 58.6 pct, while the relevant rate for employees is 0.5 pct to 1.0 pct. The agricultural sector follows closely in tax evasion with percentages of undeclared income standing at 53 pct.
However the study notes that the low percentage of tax evasion in salaried employment raises suspicions of possible “mutual agreement” between employers and employees to hide a part or the entirety of the salary, to benefit both sides: the employer avoids paying social security contributions and the employee is not taxed on income.
Apart from the medical and agricultural sectors, tax evasion is also found in construction, education, in the provision of accounting – financial services and legal services.
The study also showed that tax evasion is higher in southern Greece, where the rate of undeclared income totals 16 percent, while in the Attica region, the rate stands at 6 percent. In general, rural areas show the higher percentage of income concealment.
In terms of the family status, singles tend to tax evade less (7.2 pct), while married couples with children show a more than double percentage (10.4 pct) which tends to rise further with every added child (up to 16.7 pct for those with four or more children).