printer printer Click on the green icon on the right
The Greek people are tax hostages to the Troika and the bankers
by Louv Coukoutsi
15 January 2019

Louv Coukoutsi, CADTM correspondent in Greece

In Greece, an Autonomous Authority over Public Resources (Anexartiti Archi Dimosion Esodon, AADE), that has two sitting representatives of the European Commission, has replaced the Greek Exchequer and retrieved all the attributions of the ministry of finance. [1] Consequently, more and more ordinary taxpayers have fallen into arrears. To recover outstanding tax arrears and debts to the state the autonomous agency instigates its own repossessions on individual bank accounts without prior notice, and this even though the receipt goals of the agency have been largely attained for the third year running.

In September 2018, the due date for the second income tax payment 500,000 additional taxpayers, Natural persons and Legal entities (out of a total of 6,348,353) who have become indebted to the AADE, bringing the number of taxpayers in arrears to 4.2 million. [2]

As a result, more than 1.15 million taxpayers, natural persons and legal entities, have been subject to direct deductions on their bank accounts, pensions and wages (this amounts to repossessions of household incomes). The AADE has announced that it will proceed to another 700,000 operations of this kind in the coming months.

More than 1.15 million taxpayers have been subject to direct deductions on their bank accounts, pensions and wages

In the four years since February 2015, arrears grew from €74 billion owed by 3.9 million taxpayers (including 400,000 businesses) to €103.36 billion in December 2018, not including €80 billion in penalties. “The creditor institutions consider that the Greek economy should be bled white and the Greek people are in debt bondage,” said Nadia Valavani, Finance Minister during the first Syriza government between January and August 2015. Her archives show that the greater part of current tax arrears - €47 billion of the then outstanding €74 billion - were created after 2010 when austerity measures linked to economic “assistance” began. The €29.36 billion of new debt occurred between 2015 and 2018 and raised the figure to €76.36 billion. In other words, austerity measures are the cause of 74% of current Greek tax arrears.

Austerity measures are the cause of 74% of current Greek tax arrears

Most of the tax arrears are between €50 and €1000. The AADE has reintroduced the “100 payments [3]“ service to ease tax collection in a context where the number of households who are finding it impossible to pay is increasing exponentially.

In fact Greek wages and pensions have been cut by up to 40%, unemployment has exploded, benefits and many forms of assistance have been wiped out at the same time as direct and indirect taxes have multiplied and increased. According to the news website “The Press Project [4] which quotes a march 2018 study by the Ministry of Works, in 2018 one out of two Greeks are living below the official poverty level of less than €382 of monthly income

In 2000, Greece’s outstanding taxes represented 3.5% of Greek GDP. By 2014 the same figure had reached 40% and then 55.5% in 2018. It is to be noted that Greek GDP had withered from €242 billion in 2009 to only €186.4 billion in 2018. [5]

Nevertheless the Greek State had achieved a primary surplus of €7.626 billion in the first eleven months of 2018, significantly exceeding the €4.071 billion target announced in the provisional budget. [6]

The primary surplus records are also the result of the fiscal terrorism that reigns in Greece at this moment

It clearly shows that the Greek taxpayers (of whom 80%, namely all private and public wages and pensions or benefits, have their taxes withheld at the source, are held hostage by an unjust system that does not take into consideration the economic realities of the population.

Remember that to produce a primary surplus the government continues the brutal antisocial policies demanded by the Troika. The primary surplus records are also the result of the fiscal terrorism that reigns in Greece at this moment.

The social crisis that is engulfing France and the unjust taxation imposed by the European powers and their policies of defending the Euro is further demonstration that the oppression of the European peoples is not at all limited to Greece and that the peoples are fully aware of it. It is time to end the media repetition of the “official line”, that the Greeks are bad payers and tax evaders and they have put themselves into their current situation through their own unworthiness.

Footnotes :

[1The authority is totally, functionally, administratively and economically autonomous and is not answerable to, or under the supervision of any government authority or State or other institution. What is more, the President, the Board members, the Advisor (appointed on the proposal of the European Commission) and the Administrator act according to the law and their own appreciation; they are not subject to any superior authority whatsoever, whether official, private or administrative.

[3A system for collecting small sums from a large number of outstanding payers. A taxpayer could subscribe to paying off in up to 100 payments of a minimum of €20 each.

Louv Coukoutsi

CADTM correspondent in Greece