Value-added tax, or VAT, remains one of the most important and
Value-added tax, or VAT, remains one of the most important and most debated pillars of Greece’s tax system. While recent efforts to combat tax evasion have narrowed the so-called VAT gap, total VAT revenues still fall short compared with most other European countries, highlighting deeper structural issues in how the tax is designed and applied.
According to the latest quarterly report by Foundation of Economic and Industrial Research (IOBE), revenue losses are driven primarily by policy choices that narrow the VAT base or reduce the tax due.
IOBE notes significant progress in VAT compliance in recent years. The VAT gap, namely the difference between expected VAT revenues and what is actually collected, narrowed by 12.6% in 2023 compared with 2019. This marks the largest improvement recorded among EU member states over that period.
The reduction has helped ease the unfair distribution of the tax burden and curb distortions in competition between businesses. A key factor behind the improvement has been the expansion of electronic payments and e-commerce. Online sales rose from 3.8% of total business sales in 2018 to 6.9% in 2022, reducing cash transactions and making VAT collection easier to monitor and enforce.
Yet despite
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