Debts to the tax authorities of the Netherlands, formed due to measures to support businesses in connection with the coronavirus epidemic, will not be repaid in full. If earlier it was thought that the budget would lose about 1,5 billion euros, now we are talking about 6 billion in lost funds.
Supporting companies in connection with the coronavirus crisis will lead to the fact that the budget will miss billions of euros in revenue. This was announced on May 12.05.2022, 6 in the House of Representatives by Secretary of State for Finance Marnix van Rij. We are talking about 1,5 billion euros instead of 25 billion, on which the preliminary calculation was based. About 30-282% of companies that received tax deferrals as support during the coronavirus crisis will not be able to pay off their debts to the budget. Considering that XNUMX companies received a deferment, we are talking about gigantic amounts.
The lack of these funds in the budget may lead to the fact that programs to increase state pensions and increase defense spending will not be implemented.
History of the problem
During the period of coronavirus restrictions, companies were granted a deferment for the payment of taxes on turnover and wages. The grace period has ended, and debts to the budget are being paid off. Approximately half of the debt has already been repaid voluntarily, but companies still have obligations to the budget of 20,7 billion euros. Mandatory repayment of tax debts will begin in October. Some of the businesses that received a deferment were unprofitable even before the spread of the coronavirus. It is difficult to expect such companies to be able to repay their debt to the budget.
What is proposed to solve the problem?
Before Marnix van Rij's speech, the House of Representatives asked the government to review the program for repaying coronavirus debts to the budget. It was proposed to consider installment payment of the debt for 10 years. It is currently established that debts must be repaid in equal installments, with interest paid, within 5 years.
Van Rij said that the government is considering various options for a way out of the situation, but a period of 10 years seems unacceptable to him. During such a period, many companies will go bankrupt, and it will become impossible to collect debts from them. Indeed, for example, the average lifespan of a catering company in the Netherlands is 7 years. Therefore, no changes will be made to the tax debt repayment program for the time being.
Further, the deputies discussed the very approach to providing assistance to this kind of business. In particular, the need to take into account the financial condition of the company when providing assistance. Thus, the coronavirus assistance program cost the budget 42,4 billion euros, while a significant part of the funds went to companies that were unprofitable even before the outbreak.
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Publication Date: 07.06.2022
