BUSINESS

Hidden state debts close to 2 bln euros

PROKOPIS HATZINIKOLAOU

TAGS: Finance

The data of the Independent Authority for Public Revenue suggest that the state’s unofficial debt to the private sector is close to 2 billion euros.

This figure concerns thousands of tax rebate applications that have not yet been examined by the competent agencies. Therefore it is not considered “ascertained debt” and is not included in the amount the State General Accounting Office announces every month – which came to 5 billion euros at end-February.

Therefore the actual amount of money the state owes to the market may be more than 7 billion euros.

The average time required for the processing of applications is 350 days, and there are cases of enterprises that have been expecting the return of value-added tax for 1,660 days – or four-and-a-half years.

The IAPR’s figures also point to an impressive 800 confiscations of money from bank accounts every day in 2017, as in the first quarter of the year 50,399 taxpayers with debts to the state exceeding 500 euros were subject to forced measures.

The amount of fines imposed in the last couple of years is also quite impressive, but the collection rate is particularly low. For smuggling, IAPR inspectors imposed fines of 611.7 million euros, while undeclared incomes identified in the various lists of deposits abroad that have been handed to Greek authorities generated a tax bill of 555.68 million euros. However, a Finance Ministry response to a parliamentary question indicated that the collection rate for smuggling fines reached just 5.1 percent (just 31.19 million euros collected) while just 14.4 percent of the tax bill for undeclared incomes has been paid.

The low collection rate when it comes to dues to the state has always been a problem for Greece and its creditors have repeatedly demanded an improvement in the procedures used so as to boost state coffers. Although some steps have been taken, the problem persists, highlighting the poor state of the tax-collection mechanism.

Finance Ministry officials say an important reason cited is the various settlement plans offered by the government, which do little to aid in the creation of a tax conscience.

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