ECONOMY

Second chance for tax debtors

second-chance-for-tax-debtors

The government is offering people hurt by the coronavirus crisis the chance to pay off their tax debts created during the spring lockdown in several tranches through a regulation it will bring to Parliament.

It is also planning to allow taxpayers to rejoin the payment programs they had dropped out of because they could not pay due to the pandemic, as well as to introduce a new 120-installment arrangement for the repayment of debts stemming from failure to repay loans that were state-guaranteed. Sources say those loans add up to about 2 billion euros, or 1.1% of gross domestic product.

The new set of regulations that Finance Minister Christos Staikouras announced on Thursday makes no reference to the debts created after the lockdown in May, such as those concerning income tax, the Single Property Tax (ENFIA) or any other obligation; these debts can be arranged through the standard payment plan that provides for 24 tranches for regular arrears (income tax, ENFIA and value-added tax) and 48 installments for extraordinary ones (such as inheritance tax etc).

The new debt settlement framework specifically provides for the introduction of a new arrangement for the payment of tax obligations from March-June 2020. It will concern all taxpayers – individuals and corporations – hurt financially by the pandemic, and allow them to have all their debts settled if these have not been entered into another payment scheme. Those obligations, which will remain suspended until April 30, 2021, can be arranged as of May 2021 to be paid off in 12 tranches without interest or in 24 installments with an interest rate of 2.5%.

Taxpayers who have dropped out of their existing payment schemes due to the pandemic can rejoin them without any penalties, while those who left their programs after November 1, 2019, regardless of whether they were considered to have been hurt by the pandemic, will now have the chance to enter the standard payment plan entailing 24 or 48 tranches. To date these people were not allowed to join any other scheme.