Arrears

Greece has been taken to the European Court of Justice for the issue of overdue public debts.

After the discipline imposed by the bailouts and enhanced post-bailout supervision, leading to a reduction in the total amount of arrears and the near disappearance of pension arrears, progress has stalled and there has even been an increase in amounts.

Taxpayers' new arrears to the state exceeded 2.44 billion euros in May, the Independent Authority for Public Revenue (AADE) said in a report this week.

Although the total arrears fell to €104.8 billion in May from €107.7 billion in April, the number of taxpayers with debt rose to 4,471,762 in May from 3,687,278 a month earlier.

The Finance Ministry is planning a new scheme for the settlement of outstanding debts to the state in 100 or 120 installments, fearing the accumulation of a new generation of arrears due to the health crisis.

Last year's scheme by which debtors can settle their dues to the state in up to 120 tranches has brought many taxpayers to tax offices and additional takings into state coffers, reducing the stock of overdue arrears to the state.

The measure of the progressively protected bank account for each individual or corporation with tax overdue arrears under arrangement will become active as of January 2020. This concerns debtors who have entered any payment plan and have been consistent in meeting their obligations to it.

Overdue arrears to the tax authorities posted a significant slowdown in the nine months to end-August, according to the Parliamentary Budget Office (PBO).

The Finance Ministry is dampening expectations of a new round of social handouts, in the form of a Christmas bonus, on top of that issued to pensioners last May.

The government has committed itself to paying off all its expired dues to third parties by the end of 2020, with the exception of some special cases, whose repayment will be completed by end-2021, according to a detailed scheduled the Finance Ministry has sent to the country's creditors.

The government plans to introduce legislation that seeks to simplify the repayment of debts by individuals and businesses to tax authorities, social insurance funds and banks.
The underlying principle of the new framework will be that the number of installments will depend on the income but also on the period when the debt became overdue.

A more favorable settlement for the many people who owe social security contributions to their respective funds is included in the omnibus bill the government expects to pass in Parliament by the end of the week.