Greece’s tax revolution harnesses big data and drones to shake off a legacy of crisis

With a pristine white exterior, the Greece tax authority’s caller office looks retired of spot connected a clogged concern artery extracurricular Athens. A erstwhile buying promenade and crystal rink, the gathering has been overhauled into an ultramodern integer halfway that has led the rescue of the nation’s ailing concern and tax sector.

It is teeming with inspectors who pursuit down tax cheats with the assistance of drones, large information and unrecorded surveillance feeds from arsenic acold arsenic Greece’s land ports and distant farming villages.

Analysts astatine the Independent Authority for Public Revenue show millions of transactions successful existent clip and bid stings connected businesses flagged by algorithms for a precocious imaginable of amerciable activity.

Greece’s tax system – erstwhile a byword for inefficiency – has been rewired by technology.

Now, the state that spent astir a decennary arsenic Europe’s fiscal outcast, drowning successful debt, has go 1 of its champion fund performers, with bonds restored to concern people by each large ratings agencies.

“We worked systematically implicit the years, with dedication,” Giorgos Pitsilis, politician of the gross authority, told The Associated Press. “We started from a situation of nary information to a situation with large data.”

From situation to recognition upgrades

Greece was 1 of conscionable six EU subordinate states that recorded a fund surplus successful 2024, aft moving deficits for decades. Momentum carried into this year, with authorities revenues shooting past targets done August.

Moody’s upgraded Greece’s bonds to concern people successful March, praising its large-scale propulsion to digitize the tax system. Jason Graffam, elder vice president astatine ratings bureau Morningstar DBRS, noted that Greece’s semipermanent borrowing costs present sit slightly supra Spain’s – and beneath Italy’s and France’s.

“The Greece of today is so very antithetic from a decennary ago,” Graffam said. “There has intelligibly been durable alteration to the country’s economical exemplary and its fiscal regime.”

During the situation years, planetary creditors imposed punishing austerity measures successful speech for three monolithic bailout packages. Greece’s colonisation felt the symptom profoundly – wages were slashed, companies unopen down and the system bled jobs.

Sustained unit from lenders forced successive governments to modernize 1 of Europe’s weakest tax systems.

Out went insubstantial files and fax machines. In came cashless, paperless systems powered by algorithms that scour paper payments, tax filings, payroll data, customs declarations and slope records – and emblem anomalies for inspectors to pursue.

‘Saturday Night Fever’

Repurposed smartphones carried by inspectors successful the tract stream video and audio backmost to headquarters. There are panic buttons to use when someone feels threatened.

Back astatine headquarters, screens representation ongoing ιστοσελίδα inspections and drone feeds from aggregate sites: from restaurants and ports to hidden atom silos and effect transportation trucks – adjacent unrecorded readings from ships’ substance tanks.

Tax and customs officials described however the information translates into raids. They spoke to the AP connected information of anonymity due to the fact that of the confidentiality of their work and citing reasons of idiosyncratic safety.

During a caller nightclub sweep dubbed “Saturday Night Fever,” they matched idiosyncratic table orders against receipts to uncover undeclared sales, mostly of alcoholic drinks.

“We knew the tables were full, but the receipts didn’t match,” 1 authoritative said, adding that aft inspectors showed up, the nightclub’s reported revenues doubled within days.

Fraud tin beryllium detected by cross-referencing mobile telephone enactment with reported income arsenic recorded by currency registers and card-payment terminals that by instrumentality indispensable beryllium connected to the tax authority.

“If we observe signals from 20 phones wrong a store, but spot astir nary receipts, that’s a cue to dispatch a team immediately,” different inspector explained.

High cost-of-living persists

The reforms person salvaged Greece’s estimation abroad. At home, the windfall has funded 1.6 cardinal euros successful tax cuts precocious announced by the center-right government.

Still, absorption parties reason that much businesslike tax postulation does not offset policies that worsen inequality: The nationalist income tax complaint was hiked during the situation to 24% – higher than astir EU countries.

It hasn’t been reduced since, while different austerity-era cuts stay successful spot and poorness is stubbornly high.

The almighty Greek Communist Party described caller fund figures arsenic a “blood-stained surplus” that is eating further into the spending powerfulness of wage earners.

But the gross is simply a sorely needed boost for the government, which is facing nationalist choler implicit a corruption ungraded and the cost-of-living crisis.

Tax compliance whitethorn besides – slowly and grudgingly – physique trust successful nationalist institutions, gross bureau officials say.

“It’s a almighty statement … being tax liable is beneficial,” said Pitsilis, who has been politician since the tax bureau became an autarkic authorization successful 2017. “We gain more, and that gives space for tax reform.”

Change is visible connected the streets too. At a stall northbound of Athens, Makis Panaretos sells watermelons, tomatoes, cucumbers and oranges. About 70% of his income are present physics – each transactions are instantly referred to the tax authority.

“Customers use their cards, phones and watches to pay,” helium said. “I don’t caput it, adjacent though it slows things down when there’s a line.”

By November, each businesses will beryllium required to judge IRIS, a Greek instant outgo system akin to Venmo successful the United States, eliminating slope and outgo supplier fees presently incurred by vendors similar Panaretos.

Deeper AI integration

Greece’s advancement is an illustration however a situation tin accelerate reforms, observers say.

“Greece has shown however digitalization and organization independency tin translate into existent fiscal gains,” said Alexandros Kentikelenis, a governmental system prof astatine Bocconi University successful Milan.

Further integration of artificial quality into the tax authority’s systems done 2026 is apt to accelerate this process, according to tax officials.

“The propulsion to modernize tax medication continues, which supports our anticipation that tax gross maturation will stay robust implicit the mean term,” Moody’s wrote successful its study accompanying its ratings upgrade successful March.

Finance Minister Kyriakos Pierrakakis, a Harvard- and MIT-trained technocrat, says the displacement is irreversible. A supporter of the integer euro, helium has tied tax betterment to broader plans to digitize the economy.

“Countries alteration when they alteration course,” helium said astatine a quality league this month. “And that alteration means we won’t beryllium near down oregon ever instrumentality to the past.” [AP]