BUSINESS

Ministry unable to collect tax fines

Over 12.5 billion euros in penalties could have entered state coffers had the mechanism worked By Prokopis Hatzinikolaou

The Finance Ministry has been unable to collect court-ordered tax fines totaling 12.6 billion euros, or 6.2 percent of the country?s gross domestic product, according to data posted on Thursday on the website of the ministry?s General Secretariat of Information Systems.

The court orders came about after the taxpayers concerned disputed the fines imposed by the tax monitoring mechanism. However, partly due to being understaffed as a result of the voluntary exit program and retirements, as well as to the absence of electronic applications, the tax collection mechanism has only managed to collect 630 million euros, that is just 4.77 percent of the total sum of 13.2 billion.

The above amount includes the fine of 4.8 billion euros imposed on the Acropolis stockbrokerage for its role in the structured bonds scandal three years ago. The state has not received a single euro of that yet.

There are in excess of 180,000 outstanding tax cases in the Greek courts and there is no sign that this number will shrink significantly any time soon. While Athens had intended to have 50 percent of the pending cases heard by last month and 80 percent by the end of December, ministry data indicate that only 2.1 percent of cases made it to court in the first half of the year.

As a result it is hardly surprising that sources from the ministry are suggesting that the budget?s net revenues are showing a 1.5 percent decline from the same period in 2011, which means there is still a 1-billion-euro black hole in the budget.

Ahead of the official first-half figures to be released by the ministry later this month, sources point to a 1 percent increase in revenues in June compared to the same month last year. However, this was due to the withholding of tax returns, which were 10 percent lower than last year: The revenue figures exempting tax returns are said to show a 0.5 percent drop from June 2011. Receipts from the 2009 Single Property Tax managed to boost revenues somewhat.

Also in June, income tax receipts fell by 30 percent while value-added tax receipts declined by 7 percent.

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