VAT Gap cut from €6 billion to €3 billion with myDATA reporting, POS reporting and e-payments
Greece is turning into the new poster child of anit-VAT fraud policies.
Its Prime Minister, Kyriakos Mitsotakis, has been claiming significant progress Greece has made in reducing VAT fraud through a series of reforms aimed at promoting electronic transactions and improving tax transparency. In a recent post, Mitsotakis emphasised that the government’s measures have helped cut VAT losses by 50%.
VAT revenue increased in 2022 to 11.7% of total consumption from 8.7% in 2015, with the VAT gap (percentage of annual VAT revenue not collected) falling to 17.8% in 2021 from 26% in 2015. It remains, however, the third largest gap among EU member-states, after Romania and Malta, with the EU average rate well below 5%.
Read more in our Greece VAT guide.
MyDATA reporting delivers €3.2 billion VAT per year
Key reforms to help close the VAT Gap include the interconnection of cash registers with point-of-sale (POS) systems, the implementation of the myDATA electronic transaction recording platform, and the general promotion of electronic payments. These initiatives have significantly reduced VAT evasion and boosted public revenue by €3 billion in 2022 alone.
One of the main drivers of the VAT gap reduction is the rise in card-based payments, which became widely adopted during the COVID-19 pandemic. The government’s measures to connect tills with POS systems and implement electronic bookkeeping have also played a crucial role. The VAT gap, representing the difference between expected and actual VAT revenue, has fallen sharply from €6 billion in 2017 to €3.2 billion in 2021, with further reductions expected. According to sources, the VAT gap for 2022 is projected to drop below €3 billion, positioning Greece as one of the leading EU countries in VAT evasion reduction alongside Germany, Hungary, and the Netherlands.
Prefilled ‘locked’ VAT returns to raise €2 billion VAT
Looking ahead, the National Economy and Finance Ministry aims to further shrink the VAT gap by introducing additional measures by 2025. This includes “locking” pre-filled VAT returns for both expenses and revenue to prevent businesses from manipulating their data. The goal is to reduce the VAT gap to 9% by 2026, generating an extra €2 billion in revenue that could be used to fund tax breaks or reduce social security contributions, further benefiting households and businesses.
