Ministry sys ‘no’ to debt collection agencies

Greece is to continue to resist calls from the International Monetary Fund to have a private collection agency to chase up millions of euros in unpaid social security contributions, Kathimerini understands.

The IMF suggested in its most recent report that a private company should be formed to monitor these debts and take action to recover them when necessary. IMF officials have continued to press the Greek government on the subject since then but the Interior Ministry has refused to give ground even though the money owed by individuals and businesses is spiraling.

A total of around 18 billion euros is owed at the moment. This includes debts of 9.1 billion to the social security fund for the self-employed (OAEE) and 8.5 billion to Greece’s main social security foundation, IKA.

The government, however, believes that the recently created Center for the Collection of Social Security Arrears (KEAO) is able to fulfill the task without the need for debt collection agencies to become involved. KEAO sends out two warnings to debtors and if it has no response 20 days after the second notice, it begins the process of trying to recover the money.

At the moment there are around 210,000 debtors and KEAO has sent out 93,406 second notices. It has begun the process of collecting around 1.1 billion euros in dues. The notices it sent out led to people owing around 600 million euros arranging payment plans with authorities and those owing a total of 143 million euros paying their debts in full.

However, the IMF is unhappy that Greece has not fulfilled its commitment to staff KEAO with 250 employees yet. The fund does not believe this target will be reached before the end of September. It also suggests that another 200 employees will have to be hired on top of the 250.

The IMF suggests that KEAO should be given full access to the details of taxpayers’ assets currently held by tax offices and that any tax returns to individuals or businesses who are behind on social security contributions should be withheld so they can be used to reduce their debts to the funds.