Households and businesses had € 2.64 billion in unpaid tax debts at the end of the first five months of the year, according to the Independent Public Income Authority (IAPR), creating a gap in the year’s national budget.
Tax debt has increased by 12% compared to January-May 2020 due to the suspension of tax obligations: most companies have failed to pay their VAT due or have imposed fines imposed by the tax administration.
In May alone, traders and companies did not pay 173.3 million euros in sales tax, in May 2020 it was 30.4 million euros. The as yet unpaid fines for tax violations totaled 44 million euros in May 2021, compared to just 10 million euros a year earlier.
Still, there has been an increase in the collection of expired arrears, as 661 million euros were collected in January-May 2021, 47% more than 450 million euros in the previous year.
The IAPR announced on Thursday that the new expired taxes amounted to 2.9 billion euros in the first five months of the year, of which 2.64 billion euros related to taxes that individuals and companies did not pay. In May alone, unpaid taxes amounted to 315 million euros, a significant increase of 275% compared to the 84 million euros in May 2020.
The sum of the expired arrears, both old and new, reached € 109.08 billion, of which € 24.75 billion are considered uncollectible. The number of taxpayers indebted to the state was 3,905,073 at the end of May, 1,299,004 of which were forcible collection measures.
As debt to the tax office grows and uncertainty continues to dominate the market, the government has drawn up a plan for paying back arrears to the state, particularly for fees incurred in the first 15 months of the health crisis. In addition to the suspended pandemic debt, government planning also includes income tax and single property tax (ENFIA) debt. The plan provides for slightly more monthly tranches than the announced 24 to 48 so that the blueprint can secure the approval of the creditors.