By Prokopis Hatzinikolaou
The inefficiency of Greece’s tax collection mechanism combined with many people’s inability to pay their taxes for 2012 has resulted in expired debts for the January-November period last year to soar to 12 billion euros from 11 billion in the first 10 months, Finance Ministry data show.
As a result, as far as taxpayers are concerned, the combined total of both old and new debts to the state now stands at 55.5 billion euros.
The ministry has found that 1.13 million periodic statements for value-added tax for the same period have not been submitted by enterprises and the self-employed, which means that they have withheld the VAT received from customers for sales made or services provided.
Old debts amounted to 43.49 billion euros, 2.99 billion of which concerns state companies and corporations. Another 8.5 billion euros concerns firms that have already gone bankrupt while the remaining 31.8 billion relates to various taxpayers and enterprises. The state has only managed to collect about 1 billion euros of this old debt, while writing off some 359 million euros.
The new debts, recorded in 2012, amount to 12.07 billion euros and are expected to steadily increase. The state has only managed to collect 1.1 billion euros of this new debt and has written off another 179 million.
The total of 2.19 billion euros cashed in satisfies the requirement set out in the government’s bailout agreement with its creditors. However, the troika – as the representatives of the European Commission, the European Central Bank and the International Monetary Bank are known collectively – says in its report that some 80 percent of outstanding debts cannot be collected.
The troika recommends that the government should open debtors’ accounts and automatically withdraw the amounts that taxpayers owe to the authorities. It also says that for outstanding debts to be reduced to a satisfactory level, the government should review its policy for writing off debts.