Unpaid tax dues are swelling

Unpaid tax dues are swelling

Households and corporations had unpaid tax dues of 2.64 billion euros at the end of the year’s first five months, according to data from the Independent Authority for Public Revenue (IAPR), creating a hole in the year’s state budget.

Tax debts are up 12% compared to January-May 2020, which is attributed to the suspension of tax obligations: Most enterprises did not pay their value-added tax due, or fines imposed by the tax administration.

In May alone professionals and enterprises failed to pay VAT dues of €173.3 million, while in May 2020 the unpaid dues had come to €30.4 million. As for unpaid fines for tax law violations, they added up to €44 million in May 2021, against just €10 million a year earlier.

Nevertheless there was an increase in the collection of expired arrears, as in January-May 2021 €661 million was collected, up 47% from €450 million last year.

IAPR announced on Thursday that the new expired dues in the year’s first five months amounted to €2.9 billion, of which €2.64 billion concerned taxes that individuals and businesses failed to pay. In May alone the unpaid taxed amounted to €315 million, a considerable 275% increase from the €84 million left unpaid in May 2020.

The sum of expired arrears, both old and new, reached €109.08 billion, of which €24.75 billion is considered impossible to collect. The number of taxpayers with debts to the state came to 3,905,073 at end-May, with 1,299,004 suffering forced collection measures.

As debts to the taxman grow and the market remains dominated by uncertainty, the government has drafted a plan for the payment of arrears to the state, especially the dues created during the first 15 months of the health crisis. Besides the pandemic debts in suspension, the government’s planning also includes debts from income tax and the Single Property Tax (ENFIA). The plan provides for slightly more monthly tranches than the 24 to 48 announced, so that the blueprint can secure the creditors’ approval.

 

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