FINANCE

Tax arrears swell amid crisis

Overdue payments jump 1.7 billion euros in February, with one debtor failing to pay €800 mln

Tax arrears swell amid crisis

The energy crisis and the price hikes it has generated are creating additional problems for the government, as households are unable to meet their tax obligations: Data released by the Independent Authority for Public Revenue (IAPR) on Thursday showed tax arrears jumped 1.7 billion euros in February to come to €2.5 billion in the year’s first couple of months.

Finance Ministry officials note that this situation is reminiscent of the bailouts decade in the 2010s, when debts to the tax authorities grew at a rate of €1 billion per month and totaled €12 billion per year.

Data analysis reveals that unpaid taxes to €803 million in January, while in February there were new arrears amounting to €1.73 billion. Notably, almost half of the new debts in February – i.e. €800 million – concern a single debtor, and the other €930 million is on the shoulders of 4,087,432 state debtors. In the last three to four years the average rate of new expired arrears never exceeded €400 million per month.

However, the situation that has been created appears to be forcing many households to choose between paying for their everyday needs and their tax dues. The rate of timely income tax payments by individual taxpayers has dropped in the first couple of months this year to 65.17%, with €688.73 million of unpaid income tax dues, an increase of 144% on January-February 2021. There was also a considerable yearly rise of 424% in the failure to pay fines, with new arrears amounting to €291.4 million.

IAPR figures showed a 77.9% rise in debts in February, compared to February 2021, when unpaid taxes had come to €974 million. The total debts Greek taxpayers and corporations owe to the tax authorities came to €113.04 billion at end-February, with about €25.03 billion of that deemed uncollectible.

Only 4.86% of the expired arrears, or €5.5 billion, have entered a repayment arrangement based on one of the ministry’s payment programs. Over 2.02 million debtors are at risk of forced collection measures.