BUSINESS

Debts to the state keep piling up

PROKOPIS HATZINIKOLAOU

TAGS: Taxation, Finance

The huge tax burden of the last few years has crushed many Greeks who are unable to meet their obligations to the tax authorities anymore. In May alone taxpayers and businesses failed to pay taxes of 1.25 billion euros, according to data released on Tuesday by the General Secretariat for Public Revenue. This has taken the sum of expired debts to the state to 88.9 billion – almost 50 percent of the country’s gross domestic product.

Market sources estimate that expired debts will have soared to 95 billion euros by the end of the year, as taxpayers’ debts are growing at a rate of at least 1 billion euros per month. Notably, taxpayers will also have to face significant hikes in indirect taxes this year on top of their income tax and the ENFIA single property tax.

From 30 billion euros at the end of 2009, expired debts to the state had risen 196 percent by May 2016. This means that enterprises and taxpayers have failed to pay almost 59 billion euros to the state over the course of the financial crisis.

Obviously the bulk of this amount is no longer collectible, as most of the big debtors have either gone bankrupt or died.

It is also interesting that while the expired debts of various state corporations and municipal enterprises to the tax authorities and the social security funds exceed 8 billion euros, no effort at all has been made to make them pay their dues, or at least to offset them with other charges.

The new expired debts (those created from January to May 2016) officially amount to 5.58 billion euros. However, this does not include the debts accumulated from third-party levies, unpaid rents for state-owned properties, forfeited social security and the nonpayment of various fines and charges.

Of the debts that existed before 2016, the state has collected 1.26 billion euros, and by the end of the year it has to collect 2.05 billion euros, according to the budget’s provisions.

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