Debt

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 Ministry of National Economy and Finance is planning a stricter framework of rules on the information obligations that bad-debt management companies must adhere to in communicating with debtors, as well as improvements to the basic terms of out-of-court settlements, so that there is more debt cancellation for more debtors.

The government strategy after Greece secures investment grade and opens up to a larger number of investors is to make use of part of the high amount of cash available in a productive way and toward the reduction of the public debt.

The competent services of the Single Social Security Entity (EFKA) are asked to cross-check the debts of individuals and businesses that exceed 150,000 euros, in order to update the data by August 4 so that they can be made public without errors.

The yearly publication of the list containing the major debtors to the Greek state, which named those with debts exceeding 150,000 euros, was implemented as a measure to discourage tax evasion and delinquent payments.

About 70% of total overdue debts to the tax authorities comes from businesses, according to the Independent Authority for Public Revenue (AADE) data analyzed by the Parliament Budget Office.

The tax authorities are right to help those who find it difficult to meet their obligations. But before allowing them to enter a debt repayment scheme, they must first assess those debtors. 

Those who were found to be in debt due to weakness and those who have been caught actively evading taxes cannot be treated in the same way.

The new leadership of the Economy and Finance Ministry, as well as the tax administration, are particularly concerned about insufficient interest debtors show in rejoining the old arrangements of 72 and 120 installments for dues to the state.

Greece plans four bond reopenings via auctions in the second half of the year to boost liquidity on the secondary market, the Public Debt Management Agency (PDMA) said on Tuesday.

Sri Lankan authorities have declared a five-day closure of financial markets from June 29 ahead of a controversial move to restructure the government's domestic debt amounting to more than $51 billion.

The restructuring affects government bonds in line with an IMF bailout agreed in March, after Sri Lanka defaulted on its foreign debt in April last year and declared bankruptcy.