ECONOMY

More debtors enter payment programs

More debtors enter payment programs

An increasing number of taxpayers are resorting to paying their tax and social security dues through monthly installments, as they unable to meet their obligations normally.

Nowadays almost 1 million taxpayers and social security fund members have entered special programs for the payment of such debts; that figure could reach up to 2.5 million individuals, as the debts that had been frozen during the pandemic have now come due, such as the taxes whose payment was suspended, to say nothing of the repayment of the cheap state loans known as the “Deposit To Be Returned.”

Before the outbreak of the financial crisis at end-2009, the number of debtors stood at just under 1.09 million people. In the last few years their number has grown to 4 million, after they quadrupled during the decade-long crisis. The accumulated debts added up to 32.4 billion euros before the crisis, and are now at €111 billion; they even exceed €150 billion when overdue social security contributions are added.

Already hundreds of thousands of taxpayers and insured individuals are in payment programs, either to the standard plan of the tax authority with 24-48 tranches, the fixed plan of the social security funds with a maximum amount of 12 monthly installments, and the repayment arrangement in 100 or 120 tranches, which is now closed to any more people with debts to the tax authorities or the funds.

The debts whose payment was suspended during the pandemic come to €2.26 billion, and debtors have the option of either paying in a lump sum or entering the special programs providing for 36 interest-free monthly tranches or 72 monthly installments with an interest rate of 2.5%. Based on the latest data, some 45,000 debtors have applied to enter the settlement plan, with the deadline for applications being next Monday. Failing that, the state can trigger the forced collection mechanism. Some 820,000 taxpayers are believed to be eligible for the payment plans.

There are also some 700,000 companies that as of this June will start repaying their Deposit To Be Returned loans, or part thereof.