Greeks stop paying taxes in expectation of Syriza poll victory

A reluctance to pay taxes was much criticised by Greece’s creditors as one reason why the country needed a big international bailout. Now many Greeks are again avoiding the taxman as they bet the radical left Syriza party will quickly loosen fiscal policy if it comes to power in Sunday’s general election.

A finance ministry official confirmed on Friday that state revenues had collapsed this month. “It’s normal for the tax take to decline during an election campaign but this time it’s more noticeable,” the official said, avoiding any specific figures on the projected shortfall.

However, two private sector economists forecast the shortfall could exceed €1.5bn, or more than 40 per cent of projected revenues for January.

Angeliki Mousouri, a dentist who is paying off more than €20,000 of tax arrears, said she missed a monthly instalment due in December.

“I don’t expect to be penalised,” she said. “If Syriza is the government they will show leniency to cash-strapped taxpayers.”

Homeowners are failing to pay the latest instalment of an unpopular annual property tax known as Enfia, which Syriza has pledged to abolish as soon as it comes to power as part of measures to end five years of austerity imposed under the terms of Greece’s €245bn bailout.

The bulk of the shortfall is because of Enfia but people have also stopped paying income tax, and value added tax,” one economist said. “They’re anticipating that a leftwing government will soften tax policy across the board.”

Syriza is set to win the election even though it may not achieve an outright majority, according to opinion polls. Three polls published on Friday showed Syriza leading the centre-right New Democracy party of Antonis Samaras, the prime minister, by 4-5 percentage points.

Alexis Tsipras, the Syriza leader, would have a choice of possible coalition partners from small parties whose leaders have made clear they would co-operate with him to avert a second election.

Mr Tsipras said last week the Enfia tax would be abolished in 2015, although he added later that homeowners should still pay the final two instalments of the 2014 levy.

“This was a message of hope. Enfia is an unfair and cruel tax,” said Epaminondas Tragakis, an Athens retailer struggling to pay the tax on several properties he inherited in a central Greek city.

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>The revenue decline began last month when Mr Samaras called a snap presidential election, which triggered a general election after parliament failed to elect a new head of state.

According to finance ministry figures, the December revenue shortfall amounted to €1.3bn, compared with €3.9bn for the whole of 2014.

As polling day approaches, Mr Tsipras has announced further measures to ease the burden on hard-pressed taxpayers.

Those would include reintroducing a €12,000 tax-free allowance on income tax that was abolished as part of the bailout and extending indefinitely the time limit for paying tax and social security arrears.

“These are measures that would rescue many small businesses from closure and help the self-employed,” said a senior Athens banker. “But they would also derail this year’s budget within the first quarter.”