Greece cracks down on voucher misuse by employers

A Commission official said, “If properly used vouchers can be useful.” [Dave Collier/Flickr]

The growing trend of distributing vouchers to employees to avoid taxes has raised eyebrows in the Greek government, which has moved to crack down on unprecedented levels of tax evasion in the cash-strapped country.

The government says vouchers are allowed only as an extra benefit and not as part of a taxable salary.

But according to Greek media reports, more than 200,000 workers, mostly newcomers, receive up to 25% in their salary via vouchers, which they use in supermarkets to buy food. The total amount, according to the reports, reaches €300 million annually.

Up to a specific amount, the vouchers are tax-free for businesses, which are also exempt from employer security contributions.

A source at the Greek labour ministry told EURACTIV.com that replacing any part of the legal wage of employees with vouchers is illegal.

“Vouchers are only allowed as an extra benefit and in no case can they be a substitution for legally defined earnings,” the source noted, adding that all complaints filed with the Labour Inspectorate are being investigated.

As of June, companies are required to pay salaries only to bank accounts in order to put a stop to the practice of avoiding paying salaries altogether or paying only a fragment.

“The Labor Inspectorate (SEPE) is in constant collaboration with Greece’s Financial and Crime Unit (SDOE), the financial police and the Independent Public Revenue Authority to address all forms of labour market violations and the coordination of their audit work,” the source said.

What are vouchers?

Vouchers are coupons companies distribute to their employees to improve work, health and safety by supporting proper nutrition.

The rationale behind vouchers is that they process will enhance satisfaction and boost productivity levels while improving the employee living standards.

For the government, the proper use of vouchers should also result in more tax revenues.

The labour market in Greece has been in turmoil after 7 years of austerity-driven bailout programmes. There are cases of employers who have taken advantage of the “flexible” labour relations to impose unusual working conditions.

For many, the use of vouchers is seen as a means to improve the atmosphere at work.

Sotiris Zarianopoulos, a non-attached MEP from the Greek Communist Party (KKE), has recently asked the European Commission about these practices.

The Greek lawmaker noted that this is only a part of a “jungle labour market” created by EU policies and implemented by the leftist Syriza government.

“[Through this process] the profitability of business groups is boosted since they are exempted from paying social security contributions and enjoy tax deductions,” he said.

Contacted by EURACTIV, a Commission official briefly said: “If properly used, vouchers can be useful.”

Charis Theocharis, a centrist Greek lawmaker, told EURACTIV that isolated cases of vouchers’ misuse should not do undermine their added value to employees.

“It’s an additional tool to improve the labour conditions as well as workers’ productivity on condition that the principles of legality are respected,” said.

Proper voucher use will move people into labour market, EU official says

In light of recent misuse cases reported in Italy, an EU official told EURACTIV.com that vouchers, if properly used, could result in moving more people into the labour market and tackle undeclared work.