That kind of wholesale lying about assets, and other eye-popping cases that are surfacing in the news media here, points to the staggering breadth of tax dodging that has long been a way of life here.

Such evasion has played a significant role in Greece’s debt crisis, and as the country struggles to get its financial house in order, it is going after tax cheats as never before.

Various studies, including one by the Federation of Greek Industries last year, have estimated that the government may be losing as much as $30 billion a year to tax evasion — a figure that would have gone a long way to solving its debt problems.
...
Experts point out that ducking taxes is part of a broader culture of bribery and corruption that is deeply entrenched.
...
The cheating is often quite bold. When tax authorities recently surveyed the returns of 150 doctors with offices in the trendy Athens neighborhood of Kolonaki, where Prada and Chanel stores can be found, more than half had claimed an income of less than $40,000. Thirty-four of them claimed less than $13,300, a figure that exempted them from paying any taxes at all.

“Corruption in Greece is alive and well,” said Aliki Mouriki, a sociologist at the National Centre for Social Research. “In fact, if anything, people are now so squeezed they have fewer inhibitions about taking bribes than before the crisis.” The practice of fakelakia, or little envelopes, changing hands was supposed to have been consigned to the dustbin of history when creditors demanded a root-and-branch cleanup of a public system seen as the source of much of the country’s financial ills.

In return for the biggest bailout in global financial history – rescue funds from the EU and IMF amounting to €240bn (£188bn) – it was hoped that old mentalities would change and a nation humbled by near-bankruptcy would finally dump its culture of deceit.

Neither has happened. Instead, with rising poverty and runaway unemployment, malfeasance and mistrust remain widespread. Anti-corruption officials continue to be on the take while the self-employed, not least shopkeepers on popular tourist isles, fail to declare their true income.

Transparency International said on Wednesday that Greece’s ranking on perceived levels of public corruption was still the worst in the EU – albeit on a par with Italy – even if it had improved from 94th place at the height of the debt crisis in 2012 to 69th this year.

Greece was accepted into the Economic and Monetary Union of the European Union by the European Council on 19 June 2000, based on a number of criteria (inflation rate, budget deficit, public debt, long-term interest rates, exchange rate) using 1999 as the reference year. After an audit commissioned by the incoming New Democracy government in 2004, Eurostat revealed that the statistics for the budget deficit had been under-reported.[125]

Most of the differences in the revised budget deficit numbers were due to a temporary change of accounting practices by the new government, i.e., recording expenses when military material was ordered rather than received.[126] However, it was the retroactive application of ESA95 methodology (applied since 2000) by Eurostat, that finally raised the reference year (1999) budget deficit to 3.38% of GDP, thus exceeding the 3% limit. This led to claims that Greece (similar claims have been made about other European countries like Italy[127][128][129]) had not actually met all five accession criteria, and the common perception that Greece entered the Eurozone through "falsified" deficit numbers.