FINANCE

Easier debt payment terms in the works

Finance Ministry ponders ways to facilitate coverage of taxpayer and company obligations

easier-debt-payment-terms-in-the-works

The government is working on a plan in which the number of payment tranches for a variety of tax debts will be increased, as it strives to find ways to get people to pay off the debts they incurred during the pandemic.

Finance Ministry officials argue that the special payment plan with 24 interest-free tranches or 48 installments with interest for taxes whose collection has been suspended will not suffice to cover the losses created since March 2020; they are therefore preparing a new package that will come up for consultation at the 11th post-bailout assessment of the Greek economy by the eurozone institutions.

One of the scenarios the government is considering provides for a general arrangement for debts frozen since the first lockdown, in spring 2020, with a view to getting income tax and Single Property Tax (ENFIA) repayments started in 2022.

The scenario allows for an increase in the number of monthly installments: There will still be an interest-free two-year plan (24 monthly tranches), but there will also be options for a longer repayment period, up to 72 months, or six years, with interest of around 2.5%. That also provides for the expansion of the dues qualifying for the measure beyond the 2 billion euros of tax obligations: If the European Commission grants its consent, the payment plan may also include income tax and ENFIA debts from the previous year.

Eventually the plan could also incorporate the debts of this year; however, that is not going to be announced, as the ministry is concerned it could damage the payment culture that has been created, generating huge problems to the budget.

According to Independent Authority for Public Revenue data, the rate of timely payments across all tax categories in March stood at 91.31%, up by 12 percentage points from February and by 10 percentage points compared to the whole of 2020. In particular, the payment of value-added tax by corporations in March 2021 amounted to 91.75% of the entire sum due.