With tax evasion continuing to thrive in cash transactions, the Governor of the Bank of Greece, Yannis Stournaras, is once again bringing to the forefront the need to further strengthen incentives for electronic payments.
How electronic payments are curbing tax evasion
In the new monetary policy report, Stournaras notes that the rise in card payments and the expanded use of POS terminals in recent years have contributed to improved tax compliance, particularly in sectors with a high concentration of freelancers and self-employed workers.
However, he stresses that this progress alone is not sufficient to close the gap on undeclared transactions. In this context, he advocates extending tax incentives to consumers as a key tool for further reducing the shadow economy. According to the Bank of Greece, these incentives — and more broadly, the promotion of electronic payments — must be combined with stricter tax audits, which will help reduce the VAT gap as well as discrepancies between reported consumption and declared income in sectors where cash still dominates.
The VAT gap is narrowing
According to European Commission data, Greece’s VAT gap fell to 11.4% of potential revenues in 2023, down from 24% in 2019, while the European average stood at approximately 9.5%. The gap has narrowed considerably, but it has not been eliminated. This is why the Bank of Greece links further growth in electronic transactions to more targeted audits of professions and activities where income concealment remains easier.
Rapid rise in digital payments
At the same time, data from the Bank of Greece shows a clear and steady shift in everyday transactions toward digital money. At the end of March, active payment cards in Greece reached approximately 23.6 million, a 6% increase compared to the same period in 2025. The vast majority — around 85% — are debit cards, while prepaid cards are also recording notable growth, steadily gaining ground.
Meanwhile, in the first quarter of 2026, nearly 658.3 million card transactions were carried out, up 11.7% year-on-year, with their total value reaching €18.45 billion, compared to €16.7 billion in the same quarter of 2025. This picture confirms that card usage has now become firmly established as the primary payment method in everyday life.
According to ECB data for the first half of 2025, 73% of electronic transactions in Greece are conducted by card — a share that places the country among the highest in Europe, behind only Portugal and Cyprus. However, a slight shift in the digital payments mix is emerging, as the card share edges down marginally, with growth coming primarily from e-money instruments such as prepaid cards, as well as credit transfers.
What the Bank of Greece says about emergency fiscal interventions
Regarding the new energy crisis and the emergency measures being taken, the Bank of Greece notes that the rise in inflation driven by high energy and food costs is creating pressure for additional fiscal interventions. In this context, it underlines that, given the redistributive effects of inflation, any measures should be targeted at the most vulnerable income groups, while support for businesses should equally be targeted according to their exposure to energy price increases and supply chain disruptions.
The Bank also stresses that any potential reductions in tax rates — given the high dependence of revenues on indirect taxes — should be accompanied by structural interventions to broaden the tax base and improve revenue collection, so as to safeguard fiscal balance. Across-the-board interventions, according to the Bank of Greece, should be avoided, as although they can temporarily contain inflationary pressures, they carry a high fiscal cost and are less effective compared to targeted support measures.
