Large debtors on the ascent
State debt collections made only from the quarter of arrears still considered collectible
About 70% of total overdue debts to the tax authorities comes from businesses, according to the Independent Authority for Public Revenue (AADE) data analyzed by the Parliament Budget Office.
Most of those businesses have been bankrupt for decades, while for those that are still active, after taxes, unfortunately the legislation and the procedures that the auditors have to follow have until now led to zero results.
For example, from the imposition of a fine to the initiation of the procedures (audit report and collection), it can take at best a month or 40 days, and at worst even six months or more.
The figures show that corporations owe 70% of overdue debts, reaching 58.9 billion euros at the end of April. However, little of this amount can be collected today. For this reason the tax administration is now focusing on the new arrears that have been created, as the chances of collection are much higher compared to the old debts.
From the analysis of the data, it appears that of the €107.7 billion of total overdue debts, the actual collection is estimated at €81.4 billion. However, the truth is far from it, as the amount that can ultimately be collected does not exceed €26.9 billion – i.e. 25% of the total dues to the state. More than 90% of the collections comes from this €26.9 billion. As it is characteristically mentioned in the report: “In other words, almost all collections come from just (…) 25% of the total overdue balance.”
The AADE data also show that in the last year there has been an increase in large debtors with debts of more than €1 million each and measures have already been taken to establish whether they have assets, how they handle any money they have, as through official channels (banks) no deposits appear in most cases. According to tax administration officials, taking coercive measures is automatically activated for the above. In most cases, however, the accounts are empty, and there are no assets in the name of the debtor or entrepreneur.
