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Over 36 billion euro bad debts in Greece

21 November 2010 / 16:11:33  GRReporter
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The bad debt to the state reaches an amount of over 36 billion euros according to the report of the National audit office, which was presented to parliament at the end of this week. The main part of these revenues come from taxes and duties. The exact number amounts to 36.8 billion euros and it is 1,5 times more than the budget deficit of Greece. Its reduction made necessary the entering into the Memorandum for financial aid at the beginning of this spring, when the International Monetary Fund, European Central Bank and the European Commission agreed to grant the largest in the union’s history preferential loan to avoid financial collapse of the country.

Economic analysts point out that the strict fiscal consolidation measures, which the socialist government imposed subsequently turned out to be too high price for ordinary citizens, especially when in stead of collecting the debts in the first place, it began to cut wages and pensions and to raise taxes.

According to the National Audit office’s report for the year 2009 all outstanding debts to the state amount to 36.8 billion euros, out of which 33.55 billion euros have been declared by the regional tax offices in the country, and only 3.3 billion euros are the uncollected debts accumulated from duties. The total amount of taxes that should have been collected in 2009 amounted to 89.1 billion euros. The tax services, however, collected only 50.6 billion euros and 43.2% of the total amount remained unpaid.

The report notes that for the period of 2003-2009 year, the amount of the uncollected revenue in the Treasury have increased three times. In 2003 their value was 11.6 billion euros, and for the last year is has exceeded 36 billion euros. According to the survey in 2008 most of the uncollected revenue come from the imposition of penal charges for violations of tax laws. Even more disturbing seems the fact that in the same year the unpaid direct and indirect taxes were 32% of total volume, and in 2009 their number increased to 35%.

To avoid on the discrepancy between predicted and achieved results from now, the Ministry of Finance will undertake major structural changes in the financial management and tax administration, and will at the same time start work also on improving the reliability of public finances.
In this direction is also oriented the bill concerning the restructuring of the tax administration, which will be announced by the end of the year. According to it, about 100 tax offices will be eliminated or will merge, control activities will be restructured and special supervisory centers will be established.

Tags: EconomyMarketsnoncollectable income budget deficit Greece
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