Greece to Loose Billions in Owed Taxes

November 17, 2011 Taxation in Greece

Tax Collections in GreeceATHENS – Greece is coming up short in its tax collection targets, and efforts to collect previously unpaid taxes are not looking likely to provide any significant relief to the national budget.

According to a report published on November 17th by the European Commission, Greek tax authorities currently have a backlog of approximately 165 000 pending tax investigations. The yet to be resolved cases involve a cumulative amount of EUR 81 billion in unpaid personal and corporate taxes. Taking into considerations the current socioeconomic climate in Greece, only approximately half of the owed taxes are considered to be even theoretically recoverable, with the report claiming that EUR 8 billion is a more realistic estimate of the unpaid taxes that would likely be recovered in the near future.

The authors of the report also commented on the overall Greek tax system, saying that the country needs to quickly set about creating modern and automated debt collection procedures, and new methods of tax collection and compliance will need to be instated to ensure that taxpayers with unpaid taxes comply with their yet to be met obligations.

On a positive note, the report pointed out that Greek tax authorities are now engaging in negotiations with Swiss tax authorities, in a bid to address the issue of Greek taxpayers using Swiss bank accounts to escape tax obligations. According to estimates widely published by the Swiss media, approximately EUR 282 billion is currently hidden away in Swiss bank accounts on behalf of Greek taxpayers.

Earlier in the week Greek tax authorities revealed that tax collections for the first 10 month of 2011 were 4.1 percent below levels seen during the same period in 2010. The drop indicated that the country has not had success with its renewed efforts to enforce tax compliance, despite a series of new measures aimed directly at addressing tax evasion.

Photo by Niina ? C