The paper The Greek economy highlights 4 ways to turn Greece into one of Europe’s most profitable economies.

1. Collect the $41B due from middle and upper class Greek Business.
2. Change Greece’s credit rating from CCC to AAA so saving $46B each year (loose statistic) (Correction:Proved to be wrong, interest rate is avarage 5% not 10% so buying up dept is not as effective)
3. Giving Jobs to all of Greece’s unemployed would save $36B each year (loose statistic)
4. The effect of investing a trillion dollars into a new city in Greece dedicated to science and economics boosting investment in Greek business and so the Greek Economy proper.

This page addresses the first point

Collect the $41B due from middle and upper class Greek Business.

So let’s look at the detail

Before the “Spartan Theory” their was financial software that removed humans from the accounting system which fully integrates into a bank, ring fencing and automating payments, paying taxes, and giving faultless reports in a very easy to understand fashion. To see a demonstration applied to facebook and travel click here.

It’s really not that hard to program, the hard part, like everything is getting people to use it. So how do we get Greek Businesses on mass running their finances via this software, especially as it automatically pays tax, which is the last thing many affluent Greek business want, not because their immoral, but rather that they don’t feel their taxes are administered properly.

So why will Greek businesses use the software.

1. It will streamline their businesses removing all administrative and financial workers and the human errors and the potential for fraud, saving them salaries and costly errors.
2. It will provide faultless real time overviews for CEO’s, offer profit or loss forecasts and in general offer advice.

Well that’s the basics, but no one likes change and until their is a critical mass of people using the software obviously gaining over those that do not, few business are going to bother using it.

Well an obvious way would be to legislate, make the software intrinsically linked to the Greek Tax office and make a law that everyone needs to install it.

It would work, but it would not be popular, and if something’s not popular, that can’t be the right path.

Why not give any company that uses it, a tax amnesty on all prior taxes and tell them they don’t have to pay VAT for at least 4 years.

VAT at 25% will kill just about any business, and it’s very expensive to administer, but the obvious questions are how much of the $41Billlion not collected in tax was expected from VAT? I’ll thumb suck 1/3rd and we will look at a ¼ of Greek businesses taking up the software during the year of the amnesty.

Just on the amnesty, money that people owe in back tax has gone, it would be naive to think more than 5% will ever be received, so their is no significant financial negative for giving an amnesty.

Getting back to the VAT, by the above estimate $41B divided by 1/3rd divided by ¼ is $5B. So by giving a tax amnesty and offering no VAT to companies that use the software one looses $5B

That’s an acceptable loss.

I’ll make a complete generalisation and say that if we halved payroll tax for all companies using the software as well, we would loose about the same. So another $5B

That’s an acceptable loss.

And its possible, the loss will be far more if companies that were already paying their taxes used the system, there by eating into the bottom line figures of all VAT and Payroll Tax collected, not just the $41 Billion in uncollected taxes. I can not find any statistics on Greece Bottom line tax figures, I have a question. What is the total Greek tax yield and how is that subdivided into different taxes?

Until that question is answered and a few more, I cant put a credible figure in VAT or payroll Cuts for software users, this said, tax cuts will be a very effective way of getting the Greek citizens to use the software. And the amnesty will see many companies that are currently hiding come happily out of the woodwork.

Via the tax cuts and the amnesty, I’ve made a fair argument that ¼ of Greek Businesses (including New Businesses) will wish to use the software lets say, within 2 years.

Now we consider “The Chaos Theory” reverse engineered. In short the butterfly effect of positivity and hope of what can be achieved.

To consider “The Chaos Theory” you need to accept that the investment is raised for New Sparta and the project is underway.

This will make the Greek people proud, and having been to the brink, hit their rock bottom, they will be grateful for the change, particularly the working classes, the masses.

It would now be fair to have a country wide referendum on compulsory use of the software for all Greek Companies. The Greek people will not have any empathy for companies that wish to self administer their tax as the only reason for one doing so is to avoid tax.

The Greek citizens, now a proud people will vote overwhelmingly for all companies to pay their taxes. And with the overwhelming support of the people legislation will pass (all be it I’m not sure what the EU will say)

With all of Greece’s businesses wired into the same software, and the ability to know real time about every single cent spent, tax will be collected properly.

Of course there is another advantage to this, Government Credibility.
This article by Jeff Randal, Greek Myths the Birth of a crisis highlights the discord felt by successful business owners over the miss spending of their tax dollars.

However “Some of the world's wealthiest financiers, bankers and real estate tycoons of Greek descent also arrived for a ''power summit'' aimed at exploring business opportunities.

''If it could guarantee fair play and the eradication of corruption and bribery, we would be here helping it get out of this drama,''

As the tax revenue collection is completely automated, it will be possible to see where every cent is allocated. A Greece Spending Clock similar but for more detailed to the US Debt clock, sub divided by 1000 or so sections, will be enough to offer credible transparency.

If there is two much spending in one sector, questions will be asked, and the data available to analyse.

This plus the new tax cuts will see these men globally champion the cause of Greek industry, and again considering the tax breaks, foreign companies will start heading to Greece’s shores.

Over time, tax will need to be adjusted, but considering the New Sparta “Give Half Back” no tax policy, there is a solid argument that Greece may follow this route and abolish VAT and lower payroll tax, hence providing a very tempting environment to encourage foreign investment.

But what about the actual advantages to using the software, how does that affect the scenario? As mentioned, it will streamline their businesses removing all administrative and financial workers and the human errors and the potential for fraud, saving them salaries and costly errors. This is invaluable in terms of avoiding mistakes and fraud, but also has a huge cost saving in administrative & financial staff as well as accounting and auditing firms. For most at a minimum this will save 5% of costs, for me in 2009/10, my financial costs were 25%

Plus for CEO’s seeing exactly where all the money goes, it will become easy to see which areas are costing more than the desired amount, as well as profit centres that are performing particularly well.

To further incentivise citizens and businesses to play fair (not pay staff cash in hand, declare all the money in the till) Business or sole traders to do well (make profit) will be given business franchise opportunities in “New Sparta” If someone has a particularly profitable Olive Farm “La Olivier”, and pro rata per hector made the most profit, will be given business opportunities, for instance, their product in every market and supermarket in New Sparta.

But why stop at New Sparta, why not the whole of Greece, with all of Greece’s shops using the software they don’t only have access to the financial software, they also have access to the networks. As “La Olivier” has performed well, their product will be offered at a collective price to all of Greece’s shops, as its a collective price, its a good deal, and as its recommended, traders know they are doing the right thing for the Greek economy by ordering it.

Another example would be a restaurant or bar, “Athena’s” If the restaurant showed a good profit; the owner would be given a restaurant franchise in New Sparta. With all the students their will be plenty of staff, and with all the businessmen and scientists there will be plenty of customers.

A one year rent free property in a prime location will be offered, with lower staff costs, no VAT and no rent, it’s more than likely that successful Greek restaurateurs will make a success in New Sparta, a great opportunity with minimal risk.

There is however one difference between Greek Restaurants and New Sparta Restaurants and that is “Customer Service Ratings” All citizens and visitors to new Sparta will carry GPS ID cards. When one pays by credit card one first has to insert their ID card and rate the restaurant experience “Could Try Harder” “I enjoyed Myself” or just “Wow”

To remove bias, every time someone votes for anything (You will see this method is also used in the facebook travel presentation) it changes the effectiveness of their vote. For instance, if someone has voted “Could Try Harder” 5 times this will average out as an “I enjoyed myself” as the votes are consistent and therefore average. If however someone voted “Could Try Harder” 4 times and “Wow” once, it would see (-20%) negative marks for the 4 “Could Tray Harder’s” and a %100 positive mark for the “Wow”

What the above accomplishes is a fair voting system, and like the example in travel, its purpose is to encourage the restaurateur or more to the point his staff (as it will be identified which staff got the lower votes) to always try his best at all times.

This system will be spread throughout the city, from restaurants to Golf Clubs, to Taxi’s to teachers.

The reason this is necessary is to curb the entrepreneurial profit before customer approach, in the long run a balanced customer centric but slickly and efficiently run business will become very successful

Lastly for businesses are collective purchasing networks and distribution channels. If businesses wish their Goods for sale to be placed within a global database, say a Orange Juice company for example, shops, supermarkets, restaurants and exporters will be able to order collectively, the higher the collective order, the better the price. Improved collective purchase options, leads to lower bottom lines for companies who can either make more profit or pass the discount to the customer, one increases tax revenue, the other lowers inflation and the cost of living.
Distribution networks can be better coordinated, further lowering costs.

1. Tax amnesties, VAT & Payroll incentives give businesses that are behind or not declaring tax, excellent incentives to use the financial software.
2. Without the burden of VAT and labour, either cheaper or happier businesses that use the system are more competitive, not just to other Greek businesses but to all European businesses.
3. Businesses eliminate some or all fraud and financial mistakes and save money on financial staff, accountants and auditors.
4. The financial reporting tools provide exact real time information to CEO’s and sole traders alike, allowing decision making based on available accurate data, with economic and business specialists available to consult for free (Students and Teachers projects in the university)
5. Cooperative purchasing and shared distribution networks reduce base costs for just about all goods.
6. Businesses that record high profits are rewarded with either New Sparta supply contracts or businesses franchises within New Sparta.

That’s 6 reasons why businesses will generate more profit by using the software, businesses that are currently either failing or avoiding tax.

The vast majority of companies will make increased profit, the tax thereof collected automatically

If we take the 80,000 businesses that went bust last year and include the 80,000 expected to close this year and set an average annual turnover at $250,000, where the business was previously loosing 10% a year, the same business would now more likely make 20% profit. (A 30% swing) If the tax rate is 30% we get just under $2.4 Billion, include the 10%VAT and approximately 10% + $ 2Billlion and add the 10% Payroll tax $1, 32 Billion totals $5, 72 Billion.

Further consider the cost to the state of the, I’ll conservatively say 2 citizens per business as employees will move from job to job, and use the Euro 700 per month cost mentioned for elderly citizens support as a base line state support statistic and we have saved the state $3.6 Billion.

Total advantage to state, $9.3 Billion, and this is from troubled businesses that could not afford to pay tax in the first place, and that is not where the $41 Billion in lost tax revenue is calculated from; the vast majority is from successful businesses.

Medium sized and big successful businesses will also have the same benefits, the tax cuts and other benefits equal to a 30% cost saving, the general rallying cry of the Greek Citizens, the opportunities to do business with New Sparta, more than enough reasons to use the software.

But their is another very motivating factor, as mentioned earlier, If plans progress as predicted, a new City of Science in Sparta, Greece financially guaranteed for 4 years, National Pride at BC levels, if there was a referendum on insisting the software is an intrinsic part of the Tax System and must be used, the citizens will say yes, yes, yes.
And so with a potential referendum on the way, knowing tax evaders will be concerned about trying to explain its tax returns for the last few years, showing only a quarter of the turnover that would be recorded by the system. The only way out is to take the amnesty and use the software.

One more reason

The free software, database development and its costs!

A budget of $50 Billion, specifically for networking the software throughout Greece’s businesses.

That’s not to develop the software, that’s easy enough; its tailor making the software to different industries, which will cost the money, the best way to tailor software to a business is to work directly with the business owner. Let’s say there is half a million businesses in Greece that wish to use the software over the next 4 years, that’s an investment of $100,000 per business, of course it will be pro rata to the size and suitability of the business.

A note on the software and development. The software is currently only specked out to travel and Real Estate, it needs to be adapted to work and enhance at least 100 different specific business types, not just on financial matters but business networks, inventory, customer relations and brand improvement, Customer servise rankings and free websites

The best way to do this is real business, real people and the best programmers in the world. The University’s first priority is the creation of the software and the networks throughout Greece. Whilst the universities will have their specialist subjects, half of all students time will be on the collective networking of Greece’s computers, with 100 different industry segments every student and every teacher will relate to at least one software design.

Remember, its not just about the code, its what we want the software to achieve, any one who has a good idea adds, they don’t have to code, just be a part of the project.

The collective cost of the student’s teachers and scientists work, and the software reps and business managers that work on site in Greece’s offices and shops would cost at least $50, Billion to work.

All in all, I’m not going to estimate the amount of extra tax revenue that will collectively be collected and how much more effective Greece’s business will be, However I think its safe to say, the software will alleviate the problem of the missing $41Billion in missing tax from Greek businesses.

And that’s all that’s needed. This figure is close to the amount Greece gets further in debt with each year.
And seeing as prospects are looking up, Greece will soon move into profitability.

But how long will this take?

4 years from the day the first brick is laid in New Sparta.

Which means New Sparta has to make sure the debt balance does not rise for 4 years, $42B x 4 $168B

Well within the budget.