State coffers have swelled by over €143 million as a result of the government’s new tax ‘pardon’ – a measure allowing debtors to pay off their debts without being fined, or charged eye-watering levels of interest.
The initial results – which the Ministry of Finance said exceeded all expectations – were recorded just over a week after the measure was approved on October 3.
According to the ministry, debtors have shown “very significant interest” in the settlement deal. During the first week, individual tax payers accounted for 35% of business, while companies represented 65%.
The government describes the fiscal ‘pardon’ as a way of giving taxpayers a last chance to pay off outstanding debts by December 20 this year – while giving the state access to community funds for the 2014-20 timeframe.
The measure is hoped to reinstate financial equilibrium among debtors, avoid company insolvencies and preserve jobs – as well as make it easier for individuals to get back on track with fiscal obligations.
Ernesto Pinto, tax expert for consumer watchdog DECO, believes the measure is especially beneficial to people owing large sums.
Talking to i newspaper, he said the “temporary pardon is especially advantageous for taxpayers with debts over €2,500. There are hundreds of examples of individual tax payers who owe over €1 million,” he added.
i newspaper claims the government hopes to recover a total €700 million as a result of the ‘pardon’.
These “exceptional measures” will continue until 12 days before tough new measures against fiscal evasion come into effect on January 1 2014.
