ECONOMY

Expired debts to the state soar to more than 72 bln euros

Households’ inability to keep up with their tax payments combined with anticipation of the new repayment plans, which were finally announced a few weeks ago, led to expired debts to the state swelling further, as within one month they expanded by 1.6 billion euros to reach 12.5 billion euros from the start of the year to end-November.

In total old and new expired debts to the state come to 72.77 billion euros, according to Finance Ministry data released yesterday.

The sum of 12.5 billion euros of expired debts created from January to November mainly concerns money owed to tax authorities and social security funds and stems from the reduction in taxpayers’ incomes and the increase of the tax burden, leaving them unable to fulfill their obligations.

That sum is added to the more than 60 billion euros in old debts – those still outstanding and created before the end of 2013 – to result in the huge amount of 72.77 billion euros at the end of last month.

However, the extensive confiscation of bank deposits, salaries, rents, payments to suppliers with debts to the state, as well as the prosecution of debtors with large arrears have resulted in a significantly improved result compared to the past. In the first 11 months of the year, the sum collected by the state from the repayment of expired debts amounted to almost 3.26 billion euros, of which nearly 1.48 billion euros concerned old debts (created before January 2014), while the remaining 1.78 billion accounted for debts created this year.

Total debts of 923 million euros have also been written off.

On the inspections front the General Secretariat for Public Revenues will apparently fail to reach its targets: By the end of the year it is supposed to have conducted 720 checks on very wealthy taxpayers, but by the end of November it had only completed 609 inspections.

It’s a similar picture as far as checks on major enterprises are concerned: In the January-November period the ministry had only completed 433 checks, while the target set by the government’s agreement with its creditors had been 680 inspections.