ECONOMY

Tax mechanism wary of elections

tax-mechanism-wary-of-elections

The pre-election period and the uncertainty among citizens could create the conditions for a new generation of overdue arrears, and generally harm efforts to promote a tax-paying culture, according to the business plan of the Independent Authority for Public Revenue. It also provides for bankrupt entrepreneurs to make a new start, leaving behind past debts simply with the payment of a guarantee to the tax authorities.

The authority’s plan for 2019 includes an analysis on the external challenges the tax administration may face this year which could affect its ability to meet the collection targets set.

The analysis makes special reference to the consequences of the pre-election period that could constitute a catalyst regarding the course of the fiscal figures and indexes.

The IAPR notes that the runup to the elections “generates uncertainty for citizens, which may have negative effects on current and future output and employment, the cost of borrowing and bank loan issues.

Therefore the impact of the election cycle on the economy, although it has been contained during the period of the fiscal adjustment program application, requires particular attention as it may contribute toward the nonpayment of taxes in a timely manner, the creation of new expired debts, and generally the non-fulfillment of tax obligations.”

Meanwhile any taxpayers who went bankrupt or became insolvent in the past with tax debts of more than 100,000 euros that now wish to try their luck again in the business arena can make a fresh start with a guarantee payment of at least 15,000 euros payable to the tax authorities. This concerns past debts related to income tax, salary tax deduction, value-added tax and fines.

The IAPR business plan further provides for the possibility of new payment plans for past debts with an increased number of tranches (e.g. 120 installments) so as to facilitate taxpayers’ gradual repayment of their dues. The application of such a measure would have a positive impact on revenues and aid in the achievement of their annual target.