Greek Police Arrest 24 in Crackdown on Tax-Dodging Cashless Devices, Reports Reuters

ATHENS (Reuters) – Greek authorities announced on Monday the arrest of 24 individuals as part of a crackdown on approximately 1,000 small businesses suspected of evading capital controls and value-added tax. These businesses allegedly utilized cashless card-processing terminals linked to banks in Bulgaria.

Officials revealed that numerous small businesses, particularly within the tourism sector, were carrying out cashless transactions using point-of-sale (PoS) devices connected to banks in Bulgaria via Malta, circumventing Greek regulations designed to monitor financial movements. Greece has maintained capital controls for over a year.

Emmanuel Ploumis, head of the Greek police’s economic crime division, stated, “We arrested 24 people who were using PoS machines connected with banks outside Greece to avoid tax.” He emphasized that such practices violate capital control regulations, which mandate that PoS terminals should only be linked to Greek banks.

Tax evasion in Greece is estimated to account for 6 to 9 percent of the nation’s GDP, potentially resulting in a loss of up to 32 percent of state revenue.

The government implemented capital controls on June 28 of the previous year in response to a crisis that threatened the stability of the banking system by stemming the outflow of deposits.

Currently, Greek businesses are permitted to send money abroad solely to pay suppliers, requiring specific government and central bank permits. Individuals, on the other hand, can withdraw a maximum of 840 euros in cash every 15 days, but they have no limitations on cashless payments within the country.

Since the introduction of capital controls, the adoption of credit and debit cards has surged, as citizens seek to leave a digital footprint for tax authorities in a country historically marked by widespread tax evasion.

Ploumis mentioned that authorities uncovered 971 businesses equipped with a total of 1,195 PoS devices involved in transactions that funneled proceeds into Bulgaria. This arrangement also allowed these businesses to evade a 24 percent value-added tax owed to the Greek government.

The implicated businesses include beach bars, car rental services, and restaurants located in cities like Athens, Thessaloniki, Chalkidiki, and various islands. Ploumis noted, “They could also withdraw about 2,000 euros daily from their bank accounts in Bulgaria via ATMs in Athens, while ordinary Greeks can only access 840 euros every 15 days.”

Following the implementation of capital controls, more than 1.8 million debit cards were issued in the latter half of 2015, a significant number considering Greece’s population of approximately 11 million.