Just 10% of Greece’s €60bn in unpaid taxes recoverable

LITTLE more than 10% of the €60 billion in unpaid tax in Greece is likely to be collected, although negotiations are ongoing with Switzerland in a bid to retrieve some of what has been stashed in secret bank accounts there.

Work is ongoing too with the help of a task force of European Commission experts to spend the €20.4bn in EU funds the country was granted four years ago to help create jobs and develop the infrastructure.

The scale of the country’s problems was highlighted in the first quarterly report of the task force that is in the country since August at the request of the government to help overhaul an out-of-date and ineffective system. Greece is due to get a second bailout worth a total of €230bn and has close to a million people unemployed.

The German heading the task force, Horst Reinchenbach, acknowledged the country faces a huge challenge and, while reforms are always difficult, they are even more so under current conditions.

The IMF estimated the amount of unpaid tax was €60bn and half of this is the subject of legal action with 165,000 cases pending, some begun more than a decade ago.

“Recovery levels are not expected to be high”, the report admits putting it at between €6bn and €8bn.

But there are some signs of success with €112m in tax arrears collected during the first six months of this year by a handful of staff using new methods that includes debt collection, auditing suspected tax evaders, and closer monitoring of high-wealth individuals.

Large corporate taxpayers are responsible for a major part of the overall tax revenue and there will be offices dedicated to look after them in future, and a similar one for wealthy individuals including self-employed.

Some “quick wins” will be needed in this area, the report points out, especially since the privatisation programme, aimed at raising €50bn by the end of 2015, is well behind because of the economic crisis. About half the extensive portfolio for sale is land, 35% is infrastructure including energy, and 15% public utilities.

Normally Greece would be expected to add about 22% of its own money to funds available under the various EU funds. This has been cut to 15% and the commission hopes to reduce it to 5% to allow the beleaguered country to claim the €14bn outstanding.

Picture: Masked youths clashed with riot police outside Greece’s parliament and the US embassy in Athens yesterday as some 40,000 Greeks marched in an annual commemoration of a bloody student uprising in the 1970s. Picture: Milos Bicanski/Getty