With a mountain of overdue private debt reaching €165 billion, the government is attempting to open another settlement cycle for millions of taxpayers and businesses, bringing a new 72-installment arrangement for debts to the tax authorities and social security funds. However, data show that expectations for a massive response and a significant increase in public revenue may prove overly optimistic.
Of the total private debt of €165 billion to the state and social security funds, €114.5 billion concern debts to the tax authorities and the remaining €51 billion debts to social security funds.
The success of the new regulation needs the entry of debtors who have been out of settlement for years, have stopped their activity, have gone bankrupt or have debts more than a decade old. Over 615,000 debtors were included in the 120-tranche plan from the end of 2019, with total debts of about €5.8 billion. Only 211,551 arrangements were successfully completed, bringing to public coffers more than €1 billion in revenue. Another 84,358 remain active and concern debts of some €1.2 billion.
Crucially, more than 315,000 arrangements were lost along the way, leaving €3.5 billion in arrears.
