As we pointed out in a previous post, Greece’s recurrent financial problems have partly resulted from the twin problems of tax evasion and the large amount of unpaid tax debts. Along with measures against tax evasion such as the obligatory use of POS terminals to encourage card payments and restrictions on the size of cash payments, the government is this year intensifying its efforts to recover outstanding tax debts, using its access to bank accounts to locate funds and speeding up the process of sequestration to forestall attempts to remove the funds elsewhere.
For some years the government has been publishing annual lists of the major debtors to the State and at the end of July the AADE published two lists of individuals and companies who owe major debts to the Tax Authorities, Customs and Social Security. The total amount, even on the list of major debtors, far exceeds a previous estimate of €80 billion euros.
According to the text accompanying the lists, they concern “…the status of legal persons and entities with:
“a) primary overdue debts to the State per legal person/entity which exceed the sum of one hundred and fifty thousand (150,000) euros and the payment of which is more than a year late according to the date of retrieval of the relevant data from the information systems of the Tax Office (TAXIS/EISPRAXIS) and Customs (ICISnet).
“b) primary overdue debts to e-EFKA [the electronic Social Security system] per legal person/entity which exceeds the sum of one hundred and fifty thousand (150,000) euros and the payment of which is more than a year late according to the date of retrieval of the relevant data from the information system (OPS) of the Centre for the Collection of Insurance Contributions (KEAO).”
This year, the number of individuals owing sums of more than €150,000 stands at 11,109 compared with 10,168 last year, while the number of companies and organisations is 18,095 against 16,839 for 2023. The latter list includes bankrupt companies, innumerable limited companies, construction, advertising and insurance companies and even football clubs. The dizzying total of sums owed to tax and social security by almost 30,000 debtors is in excess of €140 billion, equivalent to more than half the country’s GDP. (Mononews.gr)
The champion debtors
The roster of the biggest debtors has not changed from last year, with the same names reappearing in the lists of both individuals and companies. The biggest individual debtor owes €425.8 million to Customs and a further €645 million in what are described as “supplementary debts” – presumably fines and interest – for a total of €1.08 billion, while the biggest company debtor is the long-bankrupt Acropolis Securities with debts to the taxman of €5.5 billion and supplementary debts of €8.3 billion, for a total of €13.8 billion.
On the companies’ list, the first 9 owe more than €1 billion each in combined tax and social security debts, while the next 9 owe more than €500 million each. In the individuals’ list, two individuals owe more than €1 billion each, while another 73 people owe more than €150 million each.
By law, the following categories of debt are excluded from the lists:
– debts which are in the process of a regulated settlement whose terms are being adhered to,
– debts which are suspended due to legal processes,
– debts classified as uncollectable,
– debts of the deceased or minors,
– debts of legal entities in the narrow and wider public sector.
Even with AADE’s capacity to sequester funds from bank accounts, the sheer numbers of large debtors (and presumably even larger numbers of smaller ones) will require enormous resources of time and manpower to make a significant impact on them. Moreover the volume of debts is constantly increasing: according Kathimerini, the amount of debt in the first 5 months of 2024 has increased by €3 billion. However, the pace of confiscation has increased significantly this year, with AADE carrying out 35,000 confiscations from the beginning of the year to the end of May.