ECONOMY

Over 70,000 debtors come forward to settle arrears

The state can expect to receive 770 million euros from 71,000 debtors who have applied for entry into a new payment plan designed by the Finance Ministry for debt to tax authorities. Already 43,000 debtors have paid the first tranche, bringing 11 million euros into state coffers, money it probably would not have seen without the new regulations, which allow for debt repayments in up to 100 installments.

Ministry officials argue that the plan will, in particular, help those who have small debts to the tax authorities. They add that in the worst-case scenario, the fiscal result of the scheme will be neutral – as repayments will offset the incentive of fine waiving – thereby providing a response to concerns expressed by the country’s creditors about reductions to the revenues of the budget.

According to the latest data by the General Secretariat of Public Revenues, nearly two in every three debtors (65 percent) have chosen to pay their debts to the state in 12 tranches. The next most popular choice of repayment method is 24 tranches. Just a handful of debtors have so far chosen more than 60 installments, given that 95 percent of debts do not exceed 5,000 euros.

There are some 21,000 debtors who have transferred from the so-called last-chance settlement that was previously introduced to this new repayment system.

Ministry figures show that expired debts to the state increased by 1.22 billion euros in October, to reach 71.5 billion euros, of which 10.9 billion date from the first 10 months of this year. The spike in expired debts is mainly the result of taxpayers being unable to meet their committments, as the General Secretariat’s data show that there are tens of thousands of taxpayers who genuinely want to settle their debts but cannot. Ministry officials estimate that from late December up to mid-January there will be more applications coming in, as many debtors who are employed in the private sector will receive their Christmas bonus, amounting to a month’s salary. The deadline for applications is March 31, 2015.