Greece has achieved a historic milestone in its crackdown on tax evasion, reducing the country’s value-added tax (VAT) gap to below 10% for the first time, according to European Commission data released this week.
The "VAT gap"—the difference between expected and actual revenue—fell to an estimated 9% in 2024, a dramatic plunge from 24% in 2019.
The reduction marks the steepest improvement among European Union member states over the last six years, placing Greece near the EU average of 9.5%.
The Commission’s VAT Gap in Europe Report 2025 estimates that improved compliance now saves the Greek state €2.7 billion ($2.8 billion) annually.
This "found money" allows the government to boost wages and social benefits without breaching strict EU fiscal rules.
Finance Minister Kostis Hatzidakis credited the success to a digital overhaul of the tax system.
"These figures confirm that our digital tools are working," Mr. Hatzidakis said.
"By linking cash registers to point-of-sale systems and mandating electronic bookkeeping, we are shrinking the shadow economy."
Losses from VAT evasion dropped from €4.87 billion in 2019 to just €2.12 billion in 2024.Officials expect further gains from additional rate cuts on 20 Aegean islands, effective Jan. 1, 2026.
Opposition parties Syriza and PASOK welcomed the revenue boost but urged the government to use the fiscal space for broader tax relief.
They argue that while compliance has improved, the tax burden on small businesses remains disproportionately high.