Greece should be THE Model for E-invoicing

greek flag

World Bank, are you listening?

Greece owes a lot of money to a lot of people, €360,000,000,000 to be exact. This is Greece's entire government debt.

We know it will probably never be paid back in full. We also know their tax system has leakages, probably severe leakages, like many emerging countries. Instead of putting tons of money into Greece that will never be paid back, get the best technology and consultants to help the government of Greece digitize their economy like Brazil and Mexico are doing for domestic trade and soon, for human labor as well.

The money invested in such a system would be paid back so fast it’s not even funny. You only have to look how Mexico reduced their shadow economy by 4% in one year by implementing einvoicing requirements with the central tax authorities. Think of the underground economy for labor.   Moving both trade and labor to a digital world would transform the tax collection of Greece. The other cultural changes (eg. average work week, retirement age, etc.) are outside of scope. But Greeks have to recognize that at some point someone will stop throwing good money after bad.

Bob Solomon wrote a piece on how the US Federal Government should phase-in a requirement that all entities that do business with it should have to submit an electronic invoice to the Federal Government to get paid (and probably get paid electronically as well, though payment initiatives seem to exist). He gave some additional reason beyond reducing tax leakage. See here

This is a no brainer and I don’t understand why the bureaucrats and policy wonks do not push this more aggressively as a condition of getting additional tax revenue. Am I missing something?

p.s. to receive TFM’s weekly digest every Monday morning, sign up here

Related Articles

Discuss this:

Your email address will not be published. Required fields are marked *