ATHENS – Struggling to find ways to cut $14.16 billion in spending and raise more revenues, Greece could realize as much as $1 billion just by collecting fines against convicted tax cheats who haven’t paid, Finance Minister Yiannis Stournaras said. A startling 99.8 percent of those fines haven’t been collected, he said, adding that Greece is still owed $17.7 billion.
Greece is racing to meet a deadline set by the Troika of the European Union-International Monetary Fund-European Central Bank (EU-IMF-ECB) which is holding back a second bailout, this one for $173 billion, until the country meets its fiscal targets. Greece is surviving on a first series of $152 billion in rescue loans, the last installment of which, some $38.8 billion is due to be released next month, but the new coalition government of Prime Minister Antonis Samaras is under pressure to reduce costs and raise monies.
The Troika has pressured Greece to go after tax evaders who owe $70 billion but a series of governments have done little. Stournaras though said there is one way to do it: “Collect the fines already imposed on enterprises,” the newspaper Kathimerini said he told the heads of tax offices and the Financial Crimes Squad (SDOE.)
SDOE handed out 4.5 billion euros, or $5.5 billion in fines in 2009, but only 0.2 percent, or about $11 million was collected. From 2009, when the crisis began and austerity measures were imposed, until the end of 2011, only an estimated $61-$73 million out of $12.3 billion in fines was collected, another dismal showing. In an attempt to improve its record, SDOE now will conduct an urgent review of unpaid fines and give tax cheats up to three years or 36 installment payments.
Stournaras said the process for collecting fines would be accelerated and toughened as court orders for fines of more than 10,000 euros, or $12,290, haven’t yet been delivered by the country’s notoriously slow court system. It takes up to 10 years to prosecute tax evaders. Stournaras said at least $1 billion in fines is going to be written off as uncollectible unless the government moves to get them.
Those monies, he said, could be used to prevent further pay cuts and more austerity measures that have crippled the country’s economy. Coincidentally, the Troika has estimated that Greece could miss meeting its tax collection targets by the same amount that hasn’t been collected from tax evaders.