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Law on Overdue Tax and Social Security Debts Postponed

Legislative measures that will allow for a new restructuring of overdue tax and social security debts has been postponed until next week as Greek and Troika officials are still hammering out the details.
However, this delay seems devastating in terms of tax collection for both tax registries and social security funds.
The measure is an effort to recoup at least some revenue from citizens and businesses with overdue tax debt which is estimated to reach a stunning 90 billion euros. The new measure will reduce the fines and interest rates to be be paid and increase the number of installments to render tax bills more affordable.
Data released by the General Secretariat of Public Revenue is quite shocking, revealing that arrears have been “inflated” by 1.4 billion euros in just one month, while data from IKA social security fund shows that in September alone, the number of its debtors has increased to 549,151 in total and by approximately 21,000 in just one month. Out of the 549,151, only 18,056 debtors are already included in some sort of settlement program.
In order to stem this debt trend, IKA’s management has chosen a rather “aggressive” policy: In the first nine months of the year, it has proceeded to 4,959 valuables’  foreclosures, 796 real estate foreclosures and 667 auctions, while it has made clear that the treatment will be similar to all those who do not settle their debts in the future.
Thousands of citizens have turned to the country’s Administrative Courts, which accumulate an incredible workload of such cases on a monthly basis. In total, 319,226 cases are still pending, regarding fines and additional taxes in dispute, 15,492 of which were added in just 3 months. Even the Council of State has approximately 5,400 pending cases, 2,376 of which are related to financial differences with the Greece ‘s Finance Ministry that do not exceed 10,000 euros.
All this data reinforce the view that apart from the need for a new debt arrangement, a new legislative framework for the settlement of “red loans” is required, since the rate of unserved debts is exponentially increasing every month. 2,813 bankruptcy cases are pending in the country’s first instance courts, 146 of which were filed in the last quarter of this year alone, while the courts of appeals have another similar 39 cases on hold.

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