It is no secret that tax evasion remains rampant in some sectors of the Greek economy, including food service, construction, tourism and others. Despite the notable measures taken in recent years, such as linking cash registers to POS terminals and the tax authority, tax evasion remains a popular national sport.The tax evasion cases involving the Pizza Fan store chain and the “To Choriatiko” bakery chain remind us how some people believe business should be done in this country, discrediting other business owners who are trying to succeed without relying on tax evasion and the evasion of social security contributions.
Unfortunately, this is unlikely to change soon, despite improved tax compliance. The relevant authorities should therefore step up inspections, whether prompted by complaints or not, and those responsible should face exemplary punishment if their involvement is confirmed.
However, the authorities should also recognise that rescuing a company implicated in such cases may be more important than making tax evaders an example of, without burdening the public purse. Maintaining thousands of jobs and safeguarding suppliers are part of the rescue.
That is why a statutory framework is already in place which separates the company and its employees from the individuals who have committed the criminal offence of tax evasion. The relevant authorities should activate the available legal tools immediately, rather than waiting to see what happens with the tax evasion case and those arrested. This is particularly important because every day the company remains closed takes an even greater toll on its reputation and customer base.
As is well known, one legal route is to place the business into restructuring proceedings with interim measures. Freezing debts and enforcement actions, together with general protection from the tax authority and creditors, allows the company to continue operating and to pay wages and for goods out of its revenue.
Another option is an application to the Single-Member Court of First Instance by employees and others for the appointment of temporary management at the company, given that those in charge are unable to run it.
Another option is to split the company into “good” and “bad” entities, with the latter inheriting its tax and other problems from the past. In that case, efforts are made to sell the “good” entity, with its brand, stores and employment contracts, to other investors.
The punishment of those responsible at Pizza Fan or “To Choriatiko” for tax evasion should go hand in hand with the activation of the legal instrument or instruments provided for under the statutory framework, to reassure employees and other creditors.
It is therefore wrong that no steps were taken from the outset, as soon as the scandals came to light, to ensure that the preferred legal solution began to be implemented immediately, for the good of the business, its employees, its suppliers and the national economy more broadly.