Hoping to curb tax evasion with a carrot instead of a stick, the Greek government will hand out 1,000 euro prizes monthly to 1000 people who use their debit and credit cards to make electronic purchases instead of using cash.
The ruling Radical Left SYRIZA led coalition has become the latest administration to be unable to cut down the phenomenon after promising a crackdown which hasn”t worked.
From the end of October, taxpayers will automatically qualify to enter a raffle on the basis of the number of their electronic financial transactions, the Finance Ministry said, hoping people would use their cards as it’s common in Greece for businesses to offer lower prices without a receipt being used so they can cheat on taxes.
With 1,000 winners each month, the scheme will cost the government a million euros per month or 12 million euros per year, a miniscule amount compared to the losses from tax evasion.
Greece first proposed the Value Added Tax (VAT) lottery system to the country’s European Union and the International Monetary Fund lenders in 2014, hoping it would help prevent budget shortfalls but it has become a required part of terms attached to a third bailout of 86 billion euros ($101.9 billion).
Electronic payments have increased significantly since June 2015, when banks were shut for three weeks and capital controls were imposed on cash withdrawals.
