Greece recovering but its taxpayers face years of pain
ATHENS, Greece — Greece is finally recovering from a fiscal crisis that stretched on for years. But for many taxpayers, the anguish is far from over.
With a $400 billion bill still to pay after eight years of international bailouts, the country’s tax office is resorting to increasingly draconian tactics, reaching directly into the bank accounts of ordinary citizens who have fallen behind on payments.
Retired school teacher Yiota Kalomiri thought some mistake had been made when she saw half her pension missing in April. Bank staff informed her they had received a seizure notice and instructions to execute it without providing any warning or formal notification.
“It was awful and it had an immediate effect on us,” said Kalomiri, who lives in the small southern town of Methoni.
“It is appalling and unfair — a policy imposed by people who don’t understand what it feels like to go to the supermarket with hardly any money or the notion of a life with some dignity.”
She said the money was seized from a joint bank account to pay for the tax arrears of her husband, who is unemployed. His debts, totaling some $2,860, were for income and property taxes.
Successive waves of emergency taxes heaped on Greeks during the crisis have left over $114 billion uncollected. That’s equivalent to more than half the country’s GDP.
October data released this week by the Independent Authority for Public Revenue — the official name for the tax office — revealed the staggering extent of the problem.
More than 4.1 million taxpayers, equivalent to two-thirds of people with taxable income in Greece, are in arrears. And about 1.15 million have been subjected to asset seizures, mostly money docked directly from their bank accounts.
Seizure orders can lead to confiscation of salaries, pensions, and even benefits paid out by the state, both for privately employed and public workers.
A report published in October by Greece’s ombudsman says money has been taken in some cases even after outstanding debts have been settled, and with little opportunity to challenge mistakes.
“It is clear that citizens are taken by surprise because the action can be taken without warning,” said Christina Florou, coauthor of the 70-page report. “They suddenly discover that their accounts have been frozen and in some cases they are even denied amounts required to live.”
Greece sought help from other eurozone members and the International Monetary Fund in 2010 when it came to the brink of bankruptcy in the wake of the global financial crisis.
The country remained under the threat of financial collapse through three successive rescue programs that ended in August this year.
But in a 2019 budget approved by parliament this week, the country committed to maintaining austerity measures and bailout-era emergency taxes indefinitely in return for a pledge from lenders to improve repayment terms in the coming years.
Without that additional debt relief, the economy could lurch back into crisis.
Greeks have been bombarded with tax hikes on their income, property, and purchased goods, with an end-of-year “solidarity surcharge” added to the annual bill. Various groups of self-employed people were even been asked to pay taxes on their projected income.
According to a recent study, the average Greek had to work until July 18 just to clear his or her taxes. That’s 50 days more than at the start of the crisis.
Back in southern Greece, Kalomiri joined small protests in recent months outside banks in the coastal city of Kalamata.
She said she managed to limit some of the money seized every month by obtaining her pension by check instead of direct deposit.
“I want people to know that this is happening without our consent and that it’s not OK,” she said.