ECONOMY

Tax settlement bill provides several payment opportunities

An improved tax settlement bill, providing for additional benefits to taxpayers, was submitted yesterday to the Greek Parliament. The bill refers specifically to unsettled tax obligations for the period 1999-2002 and, according to the final draft, professionals who keep «A class» accounts will be obliged to pay a minimum of 200 euros per financial year instead of 250 euros. Professionals, who keep «B class» accounts will have to pay a minimum of 300 euros per financial year, instead of 500 euros, while corporations, keeping accounts of the last category, will continue to pay a minimum of 500 euros per financial year. The amount of the minimum monthly installment is also reduced by 50 percent, to 150 euros. Advantages, obligations For companies and professionals to be able to take advantage of the settlement, meaning that their tax obligations are considered complete for a number of financial years without being subject to examination, the total income for each financial year under consideration must not exceed 8,804,000 euros. The bill also includes a number of beneficial measures for overdue tax obligations. An explanatory note refers to the fact that overdue tax bills, owed by about 850,000 taxpayers, are valued at more than 10 billion euros. The vast majority of people who owe back taxes, about 85 percent, owe no more than 20,000 euros, while the remaining 15 percent owe more than 20,000 euros each on average. The government aims at collecting about 1.8 billion euros by applying the regulation concerning overdue taxes, as well as 240 million euros from overdue tax statements for the financial year 2003 which, according to the new law, will carry no penalties, as long as they are submitted by the end of the month. Taxpayers who are now facing action resulting from overdue tax obligations, including such measures as the seizure of property through auction or other means, legal proceedings or even jail sentences, will be able to avoid the enforcement of these punitive measures by agreeing to pay their bills in several monthly installments. Addressing the problem of overdue tax bills is judged necessary for the following reasons: a) The financial problems faced by many sectors of the economy. b) The fact that current regulations regarding the payment of back taxes through monthly installments are of little use, as the payment period is too short. c) The enormity of additional burdens, as a result of interest charged on overdue tax bills, with average compound interest amounting to 80 percent of the principal owed. d) The fact that a large percentage of tax settlements are no longer active, as a result of payment delays. New Tax Audit Center The new bill also provides for the creation of an additional Tax Audit Center in Thessaloniki, in addition to the already existing one in Athens, in order to speed up the processing of tax cases. The Thessaloniki center will deal with cases from the regions of western, central and eastern Macedonia, Thrace and Thessaly, as well as the island of Lemnos.