The Effectiveness of Digital Payments in Tackling Tax Evasion in Greece

Abstract

: Purpose: The present paper aims to provide robust answers to the research question if digital payments can contribute to a reduction in tax evasion. Design/Methodology/Approach: To answer the research question, regression analysis was performed to determine if there a positive and statistically significant correlation between tax revenues and GDP, as well as between tax revenues and the use of electronic payment instruments. Data were collected from the Greek Independent Authority for Public Revenue (IAPR) and from the Bank of Greece. Findings: The results of the research showed that the use of digital payments does not lead to an increase in tax revenues. Although over time there has been an increase in the use of electronic payment instruments and an increase in the volume of transactions, tax revenues have fluctuated significantly. Practical Implications: Electronic payment methods are a modern way of making transactions and are an instrument which can be used to reduce tax evasion through transparency and better control. Originality/value: This research do not link in a statistically significant way the use of electronic payment instruments and the increase of tax revenues.