A study by the Centre of Planning and Economic Research (KEPE) submitted to Deputy Prime Minister Yiannis Dragasakis makes proposals aimed at reducing tax evasion in the country.
Amongst then is the proposal to encourage electronic transactions whereby credit and debit card users will be automatically entered into a draw in which they can earn prizes, the abolition of all cash transactions at all state agencies, and the offer of bonuses to retailers via a direct value-added tax rebate to encourage them to accept cards.
The benefits will be significant both for the state and consumers, for example through a 3 percent VAT discount, which is expected to benefit consumers to the tune of between 150 and 300 million euros per annum. Gains for state coffers would range between 50 and 700 million euros per year, depending on the extent to which the measure combats tax evasion.
The proposal concerns a 3 percent cut in the VAT rate for card transactions at all points of sale, so as to apply to all consumers regardless of the size of their transaction.
According to the KEPE study, a key point regarding the benefit for the state will be the extent to which the cost of returning part of the VAT will be offset by the expansion of credit card use and the revenues to stem not only through VAT but also from income tax.
For the measure not to have a negative effect on state coffers, it will have to see card transactions increase by at least 9 percent, in which case the state will gain 50 million euros per year.
Source: eKathimerini
