120 installments: Five changes to the setting
Window for improvements in settling debts to the Tax Office in up to 120 installments opens after the three-month extension given by the Finance Ministry.
120 installments: Five changes in breath-setting for millions of borrowers in.gr
June 8, 2019, 21:00
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Window for improvements in the settlement of the debts to the Tax Office in up to 120 installments opens after the three-month extension of the Treasury's deadline for placing some 3.9 million debtors in the new arrangement.
The online platform of the Independent Public Revenue Authority, through which taxpayers' applications are submitted, will be closed on June 28, but will remain open until 30 September. This extension gives the opportunity to the new government that will emerge after the 7 July elections for changes and improvements that will make the regulation more attractive in order to bring as many debtors as possible.
It is necessary
Despite the complainants' objections to the 120 installments set out in the Commission report, which see that the arrangements for debts to the Funds and the Tax Office cause budgetary costs from 600 million to 1.2 billion. Euro, government and the main opposition, having always looked at the national polls, argue that the 120 installments are absolutely necessary.
In fact, Piraeus has elaborated a plan with five changes to the settlement of the arrears to the Tax Office. With these changes, it is estimated that the settlement will be open to all debtors who now want to close their open accounts with the Tax Office, who bloated in SYRIZA's years due to the explosive cocktail of taxes and levies. The debts to the Tax Office and the Pension Funds, from € 85 billion in December 2014, exceeded € 140 billion in March 2019. They increased by 64%. Of the € 140 billion of overdue debt, € 104 billion is debts to the Tax Administration almost half of the taxpayers. About 4 out of 5 debtors owe amounts of up to € 3,000 while over 1.1 million taxpayers have experienced the nightmare of seizures in their bank accounts.
According to information, New Democracy's face-lift plan for 120-dose regulation is accompanied by incentives for consistent taxpayers, those who pay on time, taxes and insurance contributions. The main opposition has called on the banks to reward those who are consistent in order not to increase the moral hazard associated with any regulation. According to the same information, the improvement interventions in the regulation of the 120 doses processed in Piraeus provide for the following:
1. Income and property criteria only for large debts.
Debtors with debts up to € 20,000 are not directly subject to settlement. There will be no prerequisite. ND estimates that, as it currently works, the regulation is "case-law", as it sets income criteria and makes the amount of installments dependent on the declared income, even for relatively small debts.
On the contrary, its proposal concerns the overwhelming majority of debtors.
Income and property criteria will only apply to large debts and not to the many taxpayers who are now trying to stay consistent with their current liabilities. Thus most debtors will be able to join the arrangement.
2 Minimum dose cut.
The minimum monthly installment is proposed to be reduced to € 20 a month from € 30 currently in force. Lowering the minimum installment will allow taxpayers with very small debts of € 400 and € 500 to earn more installments for the partial repayment of their debts. It should be noted that taxpayers who owe taxes to the Tax Office not exceeding € 500 increased by 40,850 in the first quarter of 2019 compared to the corresponding period of 2018. Their number has now reached 2,137,009 to a total of 3,940,098 debtors, in the corresponding period of 2018 the very small debtors amounted to 2.096.159 VAT. Today, one in two tax debtors owes a small amount to 500 euros, while nine out of ten have debts not exceeding 10,000 euros.
3 Decrease in interest rate.
The rate of adjustment of 5% per annum will be reduced to 3%. In Piraeus, they think that regulation is "expensive", as borrowers are charged with a 5% interest rate when the government - with a provision recently passed by the government - has a 3% interest rate on its own debt to individuals over 2 billion. euro.
4 Increase in installments for businesses.
According to ND, the regulation is "heterogeneous", in the sense that small and medium-sized enterprises do not have the same number of installments as natural persons. It should be noted that for legal entities, the possibility of settling current debts in 24 installments and extraordinary debts in 36 monthly installments and not up to 120 installments for natural persons.
5 Incentives for consistent debtors.
Piraeus executives say the arrangement is "unfair" as it does not include any rewards for those who are consistent with their obligations to date. Thus, in order to restore ND's "injustice" to changes in 120 doses, it is accompanied by incentives for those who are consistent. This is a favorable regulation, the so-called White Registry, through which consistent taxpayers will receive premiums. Those who pay due taxes and contributions will earn a seat in the White Registry and will receive more favorable treatment. They will earn a targeted reduction in insurance contributions, tax incentives and change from tax audits. For businesses, entry for the White Registry will take into account:
- Continuous and systematic compliance with tax, labor and insurance legislation.
- The lack of complaints about breaches of tax, labor and insurance legislation, especially with regard to the use of undeclared and uninsured labor and tax evasion.
- Honest business efforts to maintain or increase total employment, etc.
Debts have choked households, which are looking for a lifejacket in the new debt settlement in up to 120 installments to settle their debts. So far, about 100,000 debtors have joined the 120-installment scheme for their debts to the Tax Office, regulating debts totaling more than € 900 million.