ATHENS – Even as the government is trying to squeeze every last cent out of taxpayers, it has failed to collect some $10 billion owed by tax evaders who’ve been ordered by the courts to pay, official data from the General Secretariat for Information Systems said. That is nearly four times more than the $2.5 billion the country was collecting by doubling property taxes which are part of harsh austerity measures imposed as conditions of receiving $325 billion in two bailouts from the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB). Their insistence that Greece crack down on tax evaders had largely been ignored until a recent roundup of nearly 200 tax cheats, although none have been prosecuted.
The government has acknowledged that tax evaders owe the country more than $72 billion but that much may never be collected, partially because of court delays up to 10 years in the country’s judicial system, which works relatively few hours. While the outstanding taxes haven’t been collected, the government has tried to save money by not paying suppliers, contractors and people who owed money. The $10 billion, about 4 percent of the country’s Gross Domestic Product (GDP), represents fines that courts have ascertained following legal disputes by taxpayers who lost their cases.
The tax courts have ruled the state should receive fines of $10.75 billion, but no more than $806 million has been collected because of retirements of tax collectors and the absence of electronic applications to support the process. There also are another 170,000 tax cases pending, with the revenues that the state is hoping for amounting to $39.3 billion. Greece has committed itself to completing all hearings by July 2013, in line with demands by its international creditors, although court backlogs make it unlikely.
In March, the head of the EU’s task force in Athens, Horst Reichenbach, said the country had made slow progress in collecting overdue taxes but had to do more. He said the government had collected some $1.2 billion last year, more than double its target, but acknowledged it was a small fraction of what could be done.
“There is about 8 billion euros in collectible revenue,” Reichenbach said, or about $10.5 billion, an amount comparable to what the courts have assessed in fines for other cases, showing the potential for revenues that have gone to waste.
(Sources: Kathimerini, New York Times)