Cyprus Mail

Greece mulls bank ATM levy, tax to legalise undeclared income abroad

Greece may impose a small levy on bank ATM withdrawals according to their Finance Minister Yianis Varoufakis

Greece may impose a small levy on bank ATM withdrawals to encourage use of credit cards, as part of a package of measures aimed at fighting tax evasion, the finance minister said on Tuesday.

“There may be, for example, a small fee on ATM (automated teller machines) withdrawals. This is under discussion as an incentive to use plastic … it has not been decided yet,” Yanis Varoufakis told reporters. “It could be a very small levy.” He categorically ruled out any tax on bank deposits.

He also said Athens is in talks with Swiss authorities on a plan to offer taxpayers with deposits abroad the chance to voluntarily declare them, pay taxes and avoid stiffer sanctions.

Under the so-called voluntary disclosure agreement, Greeks with previously unreported income in Swiss banks would be able to disclose it by paying a potential tax of 15 percent.

“At a very low tax rate, say 5 percent, there is a moral issue of legalising tax evasion. At a high rate of say 30 percent, there is a risk that these deposits may flee to the Caymann islands or to other tax havens,” Varoufakis said.

He said Swiss authorities might not agree to a deal with a high tax rate if they think the money would flee its banks. Deliberations are continuing.

“We studied the tax rates of other countries, Italy’s for example, and proposed a rate of 15 percent. It is open for deliberation, the issue is still open,” Varoufakis said.

Greece is not after having the money repatriated but wants to tax it to relieve its cash squeeze. Savers with undeclared incomes deposited in Greek banks would have the same chance, but possibly face a higher 30 percent rate, the minister said.

“We do not believe in the process of repatriation,” Varoufakis said. “What interests us is to legalise (these deposits).”

Greeks have sent billions of euros abroad since the debt crisis exploded in 2010, fearing the country may crash out of the euro zone. The deposit flight has strained its banks, which have become dependent on central bank funding for liquidity.

A portion of this money has fled to Swiss banks.

Depositors who have evaded reporting incomes would otherwise face a 46 percent tax rate and 46 percent in penalties if caught.

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