One in three Greeks have outstanding tax debts

3.3 million people owe money to the Greek state but only 187,000 people have gone for two debt settlement plans introduced by the government

One in three Greeks owe money to the tax office, according to the latest  figures released by the finance ministry’s general secretariat of public revenue. In September alone, 851,201 people were added to the list of those who owe money to the tax office.

The total number of people with outstanding  tax debts stood at 3,303,110 (link in Greek) at the end of September, up from 2,451,909 the previous month – signalling an increase of 34.7%.

The spike is attributed to the fact that thousands of people did not pay the first installment of the country’s new property tax (Enfia), due to the finance ministry’s delay in announcing new rules regarding tax exemptions for the poor, the disabled and empty properties. So many preferred to wait for the new rules to come into effect before paying.

Another reason was that many people did not pay their taxes in anticipation of government’s decision to introduce its new debt settlement plan, which stipulates 100 monthly  installments.

The total amount of debt to the state in taxes and custom levies stood at €68.4 bln at the end of September. €51.7 bln refers to debts whose payment deadline expired on 31/12/2012 while the remaining €16.67 bln was due for payment over a 21 month period stretching from 1/1/2013 to 30/9/2014.

The government’s effort to relieve the tax burden strain by introducing two debt settlements plans in summer of 2013 – one for debts with a payment deadline on 31/12/2012 and the other for debts after 1/1/2013 – have had a negligible impact on revenue collection. Of the €68.4 bln the state is owed, just €2.27 bln have gone to a settlement, which amounts to 3.3% of the total debt. And out of this 3.3%, only €1.09 bln has been paid off – in other words 48.08% of debt settlements have been paid off in full.

The  Finance Ministry is in a race against time to prepare its new debt settlement plan for inclusion in the TAXIS electronic system by November 10.