What is one to do when their country pushes austerity measures on citizens who are already being hurt by an economic recession? One way is to simply exchange your unused jewelry and gold at pawnshops and gold dealers for much needed cash. This simple business transaction becomes very popular as countries struggle through slow economic environments. One country that has seen a massive increase it these business outfits is Greece.
Officials have reported that 90% of the nation’s 224 registered pawnshops have opened in the past year which is in contrast to the general economy which saw one in four small business forced to close. These businesses have been able to grab prime real estate at great prices and still have funds to advertise heavily in magazines, newspapers and on television. The Greek government has imposed massive budget cuts while imposing new taxes on its citizens and Greek citizens have used these services to get much needed cash for these new taxes.
Although pawnshops are often used legitimately by citizens, many believe that some pawnshops can be used to illegally move money outside of the country and help people avoid taxes. Tax evasion remains one of the largest problems in Greece and costs the country roughly $58 billion annually. Inspections into pawnshops and gold dealers have shown that 80% are guilty of tax evasion and authorities have found multiple offshore companies registered to pawnshops and gold dealers based in Greece that could be used to cheat taxes. Recent raids have also caught multiple shipments of millions of dollars of precious metals leaving the country with no government documents.
While some people may say the majority of the industry is operating illegally, many simply say that the only difference now is that the price of gold is higher.