Electronic transactions lead to an increase in VAT revenues and limit the circulation of “black” money. This is evidenced by data from the Ministry of Finance for the first quarter of the year, compared with both 2022 and 2019. But in addition to increasing indirect tax revenues, an increase in operations and total turnover automatically leads to higher reporting rates. income from many categories of occupations and even from industries that are at the top of the tax avoidance list.

Doctors, dentists, car repair shops, car parks show an increase in turnover through electronic payments. Treasury officials estimate that the growth of electronic payments will lead to additional revenues of more than 1 billion euros in 2023. And this, they note, is the result of much of the receipts issued by industries that avoid issuing receipts.

According to the Ministry of Finance, in the first quarter of the year, there is an increase in electronic transactions by 18.1% compared to 2022, and compared to 2019, the growth exceeds 59%.

The pandemic crisis, the data shows, has also left a positive mark on the economy, changing the culture of payments. This is also evident from the data of the Central Bank, where the Greeks settle even for small amounts using debit cards instead of cash. However, according to the Ministry of Finance, there is still a long way to go to reach other countries where the use of cash is a thing of the past. This path seems to be passed quickly, as the interconnection of cash registers with POS, e-books, the expansion, perhaps within a year, of POS to all economic activity will help in this direction.

According to the Ministry of Finance, in 2023 electronic payments will reach 60% of personal consumption.

As mentioned above, the data that hit the financial workforce is mainly related to sectors of the economy that are prone to tax evasion. Another interesting fact is that many kiosks now have POS terminals, which can be seen from the significant increase in electronic transactions recorded by them. On the contrary, there is no data available for taxis as very few of them have POS terminals. Among the few industries that saw a year-over-year decrease in electronic transactions in the first quarter of 2023 are gas stations, which finance officials say is due to a decrease in the price of gasoline.

Accordingly, of course, part of the increase in the turnover of electronic payments comes at the expense of accuracy. According to the data, there is an increase in electronic transactions, which means more receipts are issued in the following industries:

• Auto repair shops: 25.5%.

• Parking: 35%.

• Coffee houses: 29.6%.

• Restaurants: 39.4%.

• Doctors: 30%.

• Ophthalmologists: 33%.

• Dentists: 26%.

Tourism

Of particular interest are data from the Ministry of Finance related to tourism, due to which there is a significant increase in the turnover of electronic transactions. In particular, the electronic turnover of airlines increased by 45.7%, hotels – by 84.6%, tour operators – by 59.9%, as well as souvenir shops, where card turnover increased by 58%.

According to the Ministry of Finance, in 2023 electronic payments will reach 60% of personal consumption.

According to the latest available data, private consumption reached 125 billion euros in 2021, with figures estimated at 135 billion euros in 2022.

The optimism for an increase in electronic transactions is based on the plan of the Ministry of Finance and AADE, which provides for the interconnection of cash registers with POS from the end of June, the expansion of POS to other categories of professions that are currently excluded, and the mandatory use of cards for 50% of benefits received by various categories of citizens .

What do the figures of the Bank of Greece show?

The figures from the Bank of Greece show that electronic transactions have firmly entered our lives and are increasing year by year both in terms of transaction volume and amounts. The total number of payment card transactions in 2022 reached 1,930 million compared to 1,658 million in 2021, up 16% from 2021. 17%. Debit cards continued to be the main substitute for cash, accounting for 92% of total transactions with all types of payment cards. Credit card transactions reached 154 million compared to 135 million in 2021, up 14%. Credit cards accounted for 8% of total transactions. The amount of card transactions reached 94 billion, up 14% compared to 2021. The average number of transactions per card increased by 12% to 94 transactions compared to 84 in 2021.

Connecting POS to checkouts starts in June

In June, the interconnection of cash and tax mechanisms with POS will gradually begin. In particular, by June 400,000 tax machines will be mandatory connected to the POS for businesses with a turnover of up to 100,000 euros, and by July 2023 for businesses with a turnover of more than 100,000 euros.

Of course, the connection is delayed by at least seven months, as it was supposed to start in January 2023, and for some businesses with old cash registers and problematic mechanisms (via computers), the start is delayed by at least 10 months. In particular, for 140,000 enterprises, the accession is planned for the end of October. According to officials of the Ministry of Finance, during the audits conducted in companies with problematic tax mechanisms, it was found that mechanisms are used that do not fix tables and orders, orders are recorded in files on a computer, and not in the tax mechanism (FIM), order sheets are issued , which are then either canceled without being recorded in the tax memory of the mechanism, or the final receipt is not issued and subsequently the turnover is erased.

These businesses will either have to replace their receiving mechanisms or modernize them. In fact, a €162 million fund has been set aside for modernization or replacement through the Recovery Fund. The renewal voucher costs 125 euros for the movement and 320 euros for the replacement.

By pairing cash registers with POS, EFT POS terminals will not work offline for debit transactions. This means that in a card transaction, it will not be possible to enter the payment amount by entering into the POS. The amount will come out of the cash register. With the new system, the check will look like this:

1. The transaction begins with a fiscal electronic mechanism (FEM), that is, modern cash registers for retail operations. The operator (employee or shop owner) selects “pay by card” and FIM sends a corresponding request to the EFT/POS card payment system.

2. The EFT/POS system automatically acknowledges receipt of the request to the tax mechanism, suspending it until the result is received.

3. The POS connects to the payment service provider (bank or equivalent payment service) and receives information if there has been (a) “online approval” or (b) offline approval, or (c) offline rejection, or (d) transaction abort .

4. The EFT/POS system responds to the FIM with the end result: rejection or approval. Simultaneously with the confirmation, it also sends the basic details of the transaction (eg transaction number, confirmation code, etc.) as well as data to print the receipt from FIM.

5. Tax mechanism – FIM confirms the receipt of the final result. In the event that this confirmation is not documented by the EFT/POS system for any reason, then EFT/POS creates an appropriate flag that the transaction was not processed by the tax mechanism.

Electronic bills

The European Commission is taking steps to curb tax evasion. The EU will implement electronic invoicing in cross-border transactions to minimize VAT fraud and fictitious goods. Essentially, E.E. takes measures similar to those taken by Italy, Portugal, Spain, Denmark and Norway. Electronic invoicing makes it impossible to issue virtual invoices by offering all the data to the tax authorities in real time. According to the EU plan, all transactions will be mandatory and reported in real time. The electronic transaction data will be transmitted to each country’s national tax authority and immediately thereafter, the tax authorities will share the data with other Member States by reporting it to the European Commission’s new central database.

This decentralized model is similar to how the current VAT Information Exchange System (VIES) database operates today. In particular, the plan provides for real-time digital data submission based on e-invoicing for businesses doing cross-border activities in the EU.

This will provide Member States with the valuable information they need to strengthen their fight against VAT fraud, especially chain fraud. E-invoicing will reduce VAT fraud by 11 billion euros per year, and reduce administrative and compliance costs for EU traders by 4.1 billion euros per year over the next decade.