A Greece with two fiscal faces is depicted by the Commission in its new “Mind the Gap“, the first comprehensive European analysis to examine, country-by-country, tax gaps and the efficiency of administrations. On the one hand, the digital leap has changed audits and returns.

On the other hand, a narrow and unequal tax base, a bare economy of 21% and 1,116 tax exemptions costing nearly 19 billion euros a year. The report shows a Greece that advances technologically, but continues to “bleed” in terms of revenue and fair distribution of the tax burden.

According to the report’s data, the shadow economy in Greece reaches 21% of GDP, while the inequality index (Gini) stood at 31.8%, significantly higher than the EU average. 67% of self-employed declare an annual income of less than €10,000, while 37% of taxpayers are limited to an income of up to €5,000. At the same time, 79% of all declared income comes from salaried workers – a figure that, as the Commission underlines, shows how disproportionately burdened the self-employed are compared to other categories of taxpayers.

Greece’s tax mix suggests a strong reliance on indirect taxes: taxes on consumption account for 38.9% of total tax revenues (compared to 26.9% in the EU). This is one of the highest burdens in Europe, hitting lower incomes hardest and limiting the redistributive capacity of the system. At the same time, the contribution of labour taxes remains lower than the European average, creating a less balanced system and more vulnerable to consumption fluctuations.

Even more telling is the labyrinthine web of tax exemptions. The Commission lists 1,116 different cases, at a cost of €18.82 billion in 2023, but with no permanent mechanism to assess whether they are paying off. Brussels is directly calling for systematic control of tax spending and a curb on exemptions that have no measurable impact, stressing that Greek policy has relied too much on exceptions rather than targeted interventions.
In the field of digitisation, Greece gets top marks.

The universal use of electronic declarations, myDATA, e-invoicing, the e-Proof application, automated checks of platforms such as Airbnb, and artificial intelligence tools to identify undeclared swimming pools are best practices for the EU, according to the Commission. The country has almost universal e-filing rates: 99.9% for legal entities, 98.5% for individuals and 100% for VAT.

99%, 98% for taxpayers, 98% for taxpayers, and 98% for taxpayers with VAT.
Despite strong digital performance, the report notes that Greece lacks a fully developed compliance risk management strategy and that human resources in audit functions need to be strengthened. The commission stresses that an effective tax system is judged not only by the tools, but also by the ability to systematically target, control and assess the sources of tax evasion and market distortions.

The overall picture that emerges is of a country that has made the digital leap, but now has to address the deeper problems: underreporting of income, over-reliance on indirect taxes, an underground economy and a tax-exemption system that urgently needs rationalisation. For the Commission, the message is clear: a tax base that is broader, fairer and more transparent, so that public revenues are based on real economic activity rather than on a narrow band of wage earners and consumers.