Under intense pressure from its international lenders, the Greek government said that after breaking repeated promises to do so, that this time it will chase tax cheats who owe 55.5 billion euros ($72.2 billion,) although the International Monetary Fund (IMF) said 80 percent, or about $57.7 billion, can’t be collected because the debts are too old, companies have gone out of business, or for other reasons.
With tax revenues falling far short of expectations despite big tax hikes because austerity measures have made Greeks slow spending almost to a standstill – retail sales fell 32 percent in January, during an annual sales period offering discounts up to 80 percent – the government is desperate to find cash wherever it can and said it will finally start focusing on going after those who haven’t paid.
Expired debts are being placed into two groups, the newspaper Kathimerini reported, those that can be repaid and those that cannot, so that the monitoring mechanism can focus on cases that will bring quicker results and bolster state revenues. This is included in a draft law prepared by the Finance Ministry concerning the capital market.
As an incentive for tax cheats to pay what they owe, their fines will be reduced 80 percent, the government said, while other Greeks who have been paying taxes but can’t because of pay cuts, tax hikes and slashed pensions will still have to pay 100 percent of what they owe, including doubled property taxes put into electric bills under threat of having power turned off for non-payment. Income taxes have also been doubled for those who pay them.
Uncollectible debts will enter a special file for 20 years and will then be written off, unless debtors are found to have assets, which would lead to the reopening of their cases, although critics said that’s unlikely because it takes up to 10 years to prosecute a tax cheat and the country’s financial crimes squad (SDOE) is in disarray, while some tax inspectors don’t have offices, computers, or desks and rely on Dickensian methods of stacking paper files in supermarket baskets or piling them on the floor.