FINANCE

New payment plan for dues

Finance Ministry creates framework for arrears pending the approval of the creditors

new-payment-plan-for-dues

The Finance Ministry has processed a new plan for the payment of debts created during the pandemic that will be presented to the creditors’ staff in the context of the 11th post-bailout assessment. Talks are expected to be completed next week and then the definitive plan will be announced, for taxpayers to know exactly how they will deal with the debts of the pandemic.

Sources say the government plan provides for an increase in the number of tranches (from the current 24 interest-free installments or 48 tranches with 2.5% interest), and the inclusion also of income tax and, most likely, Single Property Tax (ENFIA) debts too.

Besides the suspension of tax obligations, the ministry plans – pending the consent of the creditors – to incorporate the arrears from the 2020 income tax and ENFIA in the debt repayment mechanism, while it is also possible this year’s debts will be included.

Based on the plan, the debts that were frozen during the first and the second lockdowns and income tax and ENFIA dues will enter this extraordinary repayment plan that will start in 2022. The settlement plan will be open to companies that suspended operations, freelance professionals hurt by the health crisis, workers in closed enterprises who had their contracts suspended, and landlords who have collected reduced rents.

After December 31, it will be possible to enter those arrears into a payment scheme with the options of repayment in 24 monthly installments without interest or in 72 months with interest of 2.5%. The first tranche will be due by January 31, 2022 and the rest on the last working day of each month to follow.

The debts eligible for inclusion should not be in settlement status or concern value-added tax, salary taxes, inheritance, donation or parental concession dues, any additional levies or fines from tax and customs checks.

There is also the proposal for the inclusion of ENFIA and income tax obligations, but the creditors will have the last word on that.