Tax Evasion of individual entrepreneurship and COVID-19: The Greek Experience

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Abstract
The aim of this paper is to analyse the phenomenon of the shadow economy in the individual entrepreneurship sector of human-to-human services (H2H) during and after the period of the COVID-19 pandemic in Greece. The study demonstrates income concealment ranging from 41.46% to 59.14% in the individual entrepreneurship sector until 2017. In fact, until the emergence of the COVID-19 pandemic in 2019, the tax evasion rate reached 65%. However, since 2020, with the onset of the pandemic, there has been a reduction of 56% of the phenomenon in this sector After the end of the pandemic, tax evasion continues to decline, approaching 52% in 2022, showing a steady downward trend. This paper notes that individual entrepreneurship was not significantly affected in terms of income, which in 2020 reached €4.9 billion depicting an increase of 7% compared to 2019 (€4.6 billion), while in 2021 (€5.8 billion) and 2022 (€6.9 billion), when the economy starts to normalise after the end of the pandemic, the income increase from individual entrepreneurship soared to 19% and 17% respectively. The survey also showed a significant decrease in the consumption of clothing and household durables in 2020, by 27.43% and 15.81% respectively, a significant decrease in entertainment expenditure by 27.43% and a significant decrease in transport expenditure by 16.81%. Households significantly reduce the resources allocated to hotels and restaurants by 36.48% in 2020. Finally, expenditure on food, housing, water and energy recorded a small change, showing a stable trend that was not significantly affected by the health crisis. However, after the end of the pandemic, total household consumption expenditure increased by 9.11%.

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