A plan to revive the old arrangements for the repayment of debts to the tax authorities is on the government's table. The plan concerns taxpayers who, while they had joined the arrangements of 100 and 120 instalments for old tax debts or 120 instalments for 36 and 72 instalments for core debts, lost them as under the weight of the pandemic and the energy crisis they stopped paying the monthly instalments and are now facing seizures of bank deposits, income and other assets.

The Treasury is now considering giving those who lost their arrangements a new chance to rejoin them and settle their debts. Taxpayers who have failed to stay on track with their instalment schedule will be able to rejoin the arrangements with a penalty.

The charge will reportedly involve either an interest rate surcharge or the obligation to pay certain instalments missed from the arrangement.

According to reports, the final decisions on the timing, grid and terms of the arrangements that will be reopened for the debtors who lost them are expected to be taken at the end of February along with the other extraordinary support measures, with relevant officials reportedly "taking out of the frame" the possibility of a new debt arrangement.

The arrangements under consideration

The plan under consideration provides for the revival of the following arrangements:

100 or 120 instalments. The reintroduction of 100 or 120 instalments will be subject to the terms and conditions of the original arrangement for the outstanding debt. It is noted that in the regulation of 120 installments implemented by the government had joined more than 600,000 individuals and businesses . However, in the process several and various reasons lost it.

36 or 72 instalments for pandemic debts. The regulation applies to debts to the IRS and social security funds that were established between March 1, 2020 and July 31, 2021. These arrangements are repayable in up to 36 interest-free monthly instalments or in up to 72 instalments at an interest rate of 2.5%.

Natural and legal persons who had been identified as affected by the pandemic could join the scheme for the repayment of debts. The minimum monthly instalment was €30 for debts of up to €1,000. If the amount of debts was higher the minimum amount was €50.

The data highlighting debt repayment

According to the data of the tax administration, debts amounting to 5.3 billion euros have been included in some arrangement (100 instalments, 120 instalments, pandemic debts in up to 72 instalments and a fixed arrangement of the Ministry of Finance 24-48 instalments). Of the regulated balance, 53.5% comes from natural persons and the remaining 46.5% from legal entities.

36.4% of the regulated balance (€1.932 billion) comes from debtors with a basic debt of €5,001-50,000. 26.2% of the adjusted balance comes from debtors with a basic debt of €50,001-€300,000.

It is noted that over 4 million individuals and legal entities have overdue debts to the tax authorities. Of these, 3.8 million or 9 out of 10 owe up to 10,000 euros. In fact, the last year has seen an increase in the number of small debtors.