Greece’s Digital Tax Overhaul Signals Fiscal Turnaround

• Greece’s tech-driven tax reforms have boosted revenue, improved compliance, and helped restore its investment-grade status.

A former shopping mall on the outskirts of Athens now houses one of Greece’s most advanced public institutions. The Independent Authority for Public Revenue (IAPR) has transformed the site into a digital command center, where inspectors use drones, algorithms, and live surveillance to monitor tax compliance across the country. From island ports to rural farms, real-time data flows into the headquarters, enabling targeted investigations. The overhaul marks a sharp departure from the paper-based inefficiencies that once plagued Greece’s tax system.

From Bailouts to Budget Surpluses

After years of austerity and international bailouts, Greece has emerged as one of the European Union’s top fiscal performers. In 2024, it was among just six EU countries to record a budget surplus, with revenues exceeding expectations well into the following year. Credit rating agencies responded positively: Moody’s restored Greece’s bonds to investment grade in March, citing the digitization of tax administration as a key factor. Borrowing costs have dropped, now sitting below those of Italy and France, signaling renewed investor confidence.

Inspectors equipped with modified smartphones stream video and audio from field operations directly to IAPR’s control room. Surveillance feeds from restaurants, ports, and even ship fuel tanks are monitored for irregularities. In one operation nicknamed “Saturday Night Fever,” officials compared nightclub table orders with receipts to uncover undeclared alcohol sales. Algorithms also cross-reference mobile phone signals with transaction data, flagging businesses where customer presence doesn’t match reported revenue.

Digital Payments and Public Sentiment

The reforms have led to increased electronic transactions, even at small market stalls. Vendors like Makis Panaretos report that most customers now pay with cards, phones, or smartwatches, with each sale instantly logged by the tax authority. By November, all businesses must accept IRIS, Greece’s instant payment system, which eliminates bank fees and further integrates commerce with tax oversight. While the government touts €1.6 billion in tax cuts, critics argue that high VAT rates and lingering austerity measures continue to strain household budgets.

Observers view Greece’s transformation as a case study in crisis-driven reform. Political economy experts highlight how digitalization and institutional independence have produced tangible fiscal gains. The IAPR plans to deepen its use of artificial intelligence through 2026, aiming to enhance predictive analytics and automate more aspects of enforcement. Finance Minister Kyriakos Pierrakakis, a vocal advocate of the digital euro, links tax modernization to broader economic digitization, declaring the shift irreversible.