BUSINESS

Debt collection expected to soar

PROKOPIS HATZINIKOLAOU

TAGS: Finance

The tax administration estimates this year’s collections from expired dues to come to 6.5 billion euros, noting that debt arrangements and asset confiscations will boost revenues, after coming to 4 billion euros by end-September.

Within the last three months of the year the Independent Authority for Public Revenue expects to collect some 2.5 billion euros as a result of thousands of debtors signing up for the 12-installment payment plan. Fear of asset seizures is driving taxpayers to settle their debts to the tax authorities first and then look after any other obligations, even if their ability to shell out any more taxes has been exhausted.

Revenues from overdue debts have been on the rise since 2014 – but so have debts to the state. In 2014 the state collected 1.5 billion euros from this category of debts, rising to 3.9 billion in 2015 when the 100-tranche payment plan was introduced. Revenues then came to 5.2 billion euros in 2016 and to 5.1 billion in 2017.

A top IAPR official told Kathimerini that these revenues are mainly thanks to the tireless efforts of the tax authorities, with a campaign of online messages, telephone updates, etc, convincing many debtors to comply and pay their dues. He says that the rise in takings this year is primarily thanks to tax compliance and the inclusion of debtors in the 12-installment plans, and not due to actual confiscations.

Nevertheless, in the period from 2015 to 2018 debts to the state have soared compared with the previous years. The sum of comes to 110 billion euros (not including penalties), but as significant amounts have been collected in the meantime, the outstanding sum has dropped to 102 billion.

Figures show that the course of expired debts was as follows: By 2009 they came to to 31 billion euros; in the period from 2010 to 2014 another 34 billion was added, and in 2015 to date an additional 45 billion was piled on.

Crucially, the number of debtors has quadrupled in eight years, from about 1 million in 2010 to some 4 million in 2018.

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