No room at the taverna for Greece's eager tax inspectors

The night two taxmen rolled up on Hydra and got their comeuppance from furious locals

BY Lalya Lloyd LAST UPDATED AT 13:19 ON Fri 24 Aug 2012

FELLOW Europeans who suspect the Greek authorities are not trying hard enough to meet the tough reform targets set by the money-lenders of the IMF and the Central Bank might be surprised to learn what lengths the country's tax inspectors are now prepared to go to in their drive to collect unpaid taxes.

Whether the authorities' efforts will pay off is another question.

Last Friday night, two tax inspectors, travelling incognito from Piraeus on the mainland, arrived on the Aegean island of Hydra where they entered the Psaropoula fish restaurant in order to arrest the owner for failing to issue customers with VAT receipts.

When the elderly owner expressed shock at the intrusion, local police were called, at which point she fainted and had to be taken to
hospital. The tax inspectors, unwilling to leave Hydra without a result, then arrested her son, a man in his twenties, instead.

Bemused diners looked on as the man was handcuffed and led aboard a waiting ship. But this was a step too far for his friends and relatives, many of whom work in the surrounding restaurants and shops. An angry mob pulled the man back onto the quay and cut the ship's mooring ropes.

The taxmen then rushed their detainee to the local police station where they remained all night as the young man's supporters besieged the station, cutting off its water and electricity supplies.

Early on Saturday morning, a naval ship arrived with police to break the impasse and release the beleaguered taxmen. Later that day, a judge in Piraeus would rule that the man had been wrongly arrested and throw the charges out. But it was very far from case closed for the residents of Hydra.

At 8.30pm on Saturday, 30 heavily armed riot police arrived in the island's harbour, escorting a fresh cadre of tax inspectors on rounds of local businesses. Hydra police were unavailable for comment and it was unclear if the riot police had been called in response to a plea from the local sheriff or if the order came from the higher echelons of government.

Either way, they were greeted by a crowd which booed, slow-clapped and hissed. Despite the obvious hostility, no arrests were made,  nor was there a repeat of the previous day's violence.

There is no doubt that Greece needs to sharpen its tax collecting skills. "Everyone cheats," said a barman in his thirties. "Now VAT is 23 per cent, but even when it was eight per cent, we would try to steal a bit for ourselves."  He rolls his eyes as if to say, "No wonder there's no money left".

The question, of course, is whether this was an isolated incident or whether it presages a new hardline approach to tax collection in Greece. If the latter, the New Democracy coalition needs to proceed with caution. For the older generations, the sight of gun-toting heavies on an island paradise is painfully reminiscent of the German occupation of Greece during WW2 and of the military  dictatorship of 1967-74.

The Greek government has promised systematic clampdowns on tax evasion through the financial crimes squad (SDOE). Europe's  leaders will doubtless be hoping last weekend's events on Hydra are the start of something beautiful. · 

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