ECONOMY

Ministry gets tough on debtors

The Economy and Finance Ministry has told tax officials to sell off assets held by taxpayers owing money to the state or file criminal charges against them, as it desperately looks for ways to fill gaping fiscal holes. The Ministry has ordered the filing of legal actions against those who persistently refuse to pay their tax bill, despite opportunities to settle the amount, in a bid to gather 8 billion euros in budget revenues. The government estimates it is owed a total of 26 billion euros but only about 8 billion can be collected, since the remainder of the debt is owed by companies that have since gone bankrupt and government organizations that refuse to pay. «The initiation of legal procedures to secure the amounts owed will target those who had the opportunity to settle their debt but have continually refused to do so,» Deputy Economy and Finance Minister Antonis Bezas said in a letter sent to all tax offices yesterday. Tax inspectors have been told to pass the relevant files to debt collectors that are contracted by the ministry and to secure the money before the year is out. Projections of Greece’s budget deficit are continually worsening as the year progresses and the economy slows. Government sources have indicated that the budget deficit is likely to be around 5 to 6 percent of gross domestic product this year. The dire fiscal situation forced Economy and Finance Minister Yiannis Papathanassiou last week to ask the European Commission for a two-year extension to lower the deficit to below 3 percent of GDP in exchange for a commitment to push through structural reforms. Sources suggest Papathanassiou will be granted the extra time, assuming the conservatives are re-elected in a snap poll in October. Greece’s budget problems are not limited to the revenue side but are also a result of an expenditure overshoot, with spending in the January-July period jumping 22 percent versus the annual target of a 9.7 percent rise.