PPC warns VAT hike will spark new wave of unpaid bills

PPC, the Public Power Authority, has warned the alarming level of unpaid overdue electricity bills owed to the company, which recently exceeded 1.8 billion euros, would be driven to even higher levels if a 10 percent VAT hike on power bills, from 13 percent to 23 percent, proposed by the country’s lenders amid the bailout talks, is implemented.

The power corporation began encountering major collectability problems when a previous property tax (EETIDE) was levied on electricity bills several years ago, prompting enormous power bill amount increases and a growing inability of consumers to pay. The collectability effort continued to worsen for PPC amid the deep and ongoing recession.

However, in more recent times, some positive signs seem to be emerging as certain consumers have begun paying electricity bill arrears following increased pressure from PPC, now under a new leadership.

Even so, the company’s first-quarter results, reported just days ago, indicated that, on a wider level, a significant number of consumers, both households and enterprises, are not meeting bill requirements. The situation is worse for business connections, as the wave of company closures is making the recovery effort next to impossible for PPC in such cases. The level of doubtful debts rose in PPC’s first-quarter results, from 158 million euros to 187 million euros.

PPC’s recently appointed CEO, Manolis Panagiotakis, has already placed increased collectability as a top priority for the company. The campaign is being backed by an organized effort to determine and target consumers able but not willing to pay.  Another leading priority at the company is to reduce the cost of electricity for consumers. Both these objectives would be undermined by a VAT hike on electricity bills.