Tax dodgers at the sharp end of discontent in Greece

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The Independent Online

Doctors are being spoken of as if they were wanted terrorists on Greek television these days.

The naming and shaming this week of 68 high-earning medical professionals for not paying their taxes is the latest show of determination by the Greek government, in its quest to prove it can dismantle a culture of tax-dodging that has helped bring the country to the brink of bankruptcy and undermined the rest of the eurozone.

In the Kolonaki suburb of Athens, a government audit uncovered cases where doctors had never issued a single receipt or recorded any patients' visits. The worst offenders, some of whom had declared an annual income as low as €3,000 now face massive fines and even criminal charges. Some have had their bank accounts frozen on suspicion that they owe money to the state. "The attitude that you do not pay taxes is what has brought the country to its knees", Prime Minister George Papandreou said as he announced the move which is partly designed to appease public anger at the perception that Greece's richest classes are escaping the tough economic medicine.

But the medical profession have reacted angrily. "The shaming of whole groups or professional classes is not right," dental surgeon Stratis Papazoglou said. "This creates hatred in society. In all professions, unfortunately, there are those who avoid paying their taxes. The government should try to instill in people a respect for justice and a sense of equality before the law and not target single professional groups".

Vasileios Pagkalos, a Greek plastic surgeon who has relocated to Israel, however, admitted: "Tax-dodgers are ruining everyone's reputation. The controls are too severe but they need to set an example" .

According to Transparency International, the unrecorded or "black" economy in Greece could be worth a staggering 40 per cent of the country's GDP. This would mean projected tax revenues of €54bn (£46bn) for the fiscal year 2010, should be €21bn higher and significantly help the government fill its empty coffers.

It is not just the doctors who are in the firing line. The tax authorities have also declared war on the owners of "undeclared" swimming pools. Using Google Earth, finance ministry officials surveyed the wealthy northern Athens suburb of Ekali and were able to identify 425 villas with pools. But only 170 homeowners had legally declared their pool. Failure to declare ownership is categorised as tax-dodging.

Ministry officials say some rich homeowners are hiding their pools from the spying eyes of the taxman with camouflaged covers. Kosmas Haralambidis, a manager at one Athens pool manufacturing firm said a new swimming pool could cost as little as €15,000-€18,000. A permit from the government however costs upwards of €5,000. "Not only the rich own swimming pools", he said.

The government measures are in the right direction, believes Alekos Papadopoulos a politician who as long ago as 1995 attempted to address Greeks' appetite for tax-evasion by bringing in help from the US's Internal Revenue Service. "Paying one's taxes is a moral matter," he said.

Mr Papdopoulos said even the harshest reforms could be implemented in Greece, as long as they were seen to be just. All business payments for example could be made through the banking system, something that Greece has yet to do. Tax cheating he said, remains "systemic".