Greece Cracks Down On Tax Cheats As Public?s Anger Swells

Ahead of the most important election ever in Greece, the Athens government appears to be cracking down on one of the many factors behind the country’s financial catastrophe – tax evasion by wealthy citizens and corrupt politicians.

One such larcenous lawmaker, Akis Tsohatzopoulos, who was recently arrested, has become a symbol of the profligacy of many elite Greeks.

A former prominent Socialist minister, the 72-year-old Tsohatzopoulos was charged with money laundering, tax evasion and accepting bribes. His lavish lifestyle included a luxurious neo-classical mansion near the foot of the famed Acropolis. Among other extravagances, his young wife spent €20,000 ($25,300) just on shower curtain rods; and they also spent their honeymoon at the tony King George V hotel in Paris (one of the most expensive hotels in the world, with some rooms costing almost $25,000 per night).

The case of Tsohatzopoulos has particularly outraged millions of Greek who are suffering under steep unemployment, higher taxes and severe spending cuts by the government under mandate from the European Union.

Some Greeks are likely to vent their anger by supporting the anti-austerity radical leftist Syriza party in this weekend’s poll -- thereby rejecting the mainstream Socialist Pasok party, which is closely linked to both the EU/UMF bailouts and corruption.

I lost all my money while people like Tsohatzopoulos were taking bribes and evading taxes, and you're asking me if I'll vote for them [Pasok]? said Dimitrios Panagiotou, 71, a retired pensioners who saw his income cut by one-third, according to Reuters.

Tax evasion – not only by politicians, but also well-heeled doctors, lawyers and other wealthy professionals – is believed to cost the Greek government €45-billion ($57 billion) annually (equal to about one-fifth of the country’s GDP).

Most Greeks are subject to a tax of between 25 and 40 percent of their income – while wealthy shipbuilders, among other business owners, are taxed at a lower rate or given generous exemptions.

My parents have paid taxes all their life and have nothing to show for it -- but the rich always find loopholes to escape, Niki Argyriou, a 19-year-old student, told Reuters.

There's no way I will vote for either New Democracy (ND) or PASOK.

If a substantial number of Greek voters follow Argyriou’s example, pro-bailout parties will have no hope of scoring a victory in Sunday’s election, nor of forming a coalition.

Antonis Samaras, the head of ND, had tried to appease the angry public by promising to crack down on tax evaders.

Our top priority is to show the [Greek] people that we have understood what they want: justice, he said on Wednesday.

Athens is also seeking to find and prosecute wealthy Greek tax cheats who are living in foreign nations.

The country’s finance ministry said it will concentrate its focus on Greeks who have moved to London, England and are suspected of having avoided paying their taxes.

George Zanias, the caretaker finance minister, said that about 550 Greeks living in the UK will be investigated for failing to pay taxes to the Athens government.

Zanias also ordered his tax inspectors to probe the accounts of Greece’s 1500 largest tax debtors as well as another 23,500 Greeks who receive interest in property or deposits held abroad.

The Telegraph newspaper of the UK reported that many wealthy Greeks have been buying up property in London, including luxury homes, over the past two years, while their native country has been sliding into an abyss.

Greeks have also been withdrawing money from Greek banks in droves, out of fear that the country will soon have to exit the euro – about one-fifth of this money is estimated by the government to have moved overseas.

No less a figure than IMF chief Christine Lagarde has condemned Greeks for avoiding to pay taxes and the Athens government for fling to prosecute such cheats.

I think that tax compliance is a necessary tool to restore any country's situation -- Greece, like others, she told the US cable network CNN earlier this week.