According to the newspaper Financieele Dagblad (FD), about 135 companies could face problems when, from October will have to pay billions of "coronavirus" tax debts. During the coronacrisis, many entrepreneurs were granted a tax deferral, which helped to prevent bankruptcy. Then the business owners hoped for a quick recovery of their solvency, but this did not happen.
Adverse factors
According to a survey conducted among representatives of small and medium-sized businesses (kleine en middelgrote bedrijven - MKB), most entrepreneurs are worried about the combination of such unfavorable factors as the need to pay back taxes (on the one hand) and rising costs for energy, rent, raw materials and wages (with another).
Numbers
Of the original €47bn tax debt, nearly €20bn is still outstanding. About 280 entrepreneurs remain in debt. Problems are expected in almost half, which could lead to outstanding debt 9 BILLION EURO.
Indulgences
In July, the government announced available incentives that entrepreneurs can take advantage of: 1) periodic breaks in payment; 2) quarterly payments instead of monthly. In some cases, special arrangements are also possible.
Losses
A statement from the MKB-Nederland association states: “Not all companies have been able to cope with the damage from the corona crisis, and many entrepreneurs cannot – or hardly can – cope with increased costs now.”
According to Hans Biesheuvel of the business organization ONL, the situation in the catering sector is "hopeless". The shortage of personnel negatively affects the solvency of enterprises. For example, for this reason, many catering companies operate with restrictions and therefore create fewer reserves. With rising prices, high energy bills and other adverse factors, even extending the maturity of the debt won't help, Bishevel said. According to an industry report published by ABN Amro, 17% of food service establishments suffered losses. However, the tax debt has become an unbearable burden not only for the owners of this business - in the field of recreation and entertainment, from 20 to 36% of companies suffered losses.
bankruptcy
Even discussing the situation in the summer, the Ministry of Finance defended the position of the inexpediency of further easing. The number of bankruptcies, according to government forecasts, will increase slightly, while those companies that were not viable before the coronavirus crisis will go bankrupt.
The ministry feared that further assistance would create an unequal playing field: companies that perform well without support must compete with companies that perform worse but receive support.
Offers from business organizations
Coronavirus debts have piled on entrepreneurs at an unfortunate time, when rapidly rising wages and energy costs are barely keeping afloat. In addition, small companies will have to pay more income tax, and government relief may not be enough.
Entrepreneurs say that with electricity bills four (and in some cases eleven) times higher than before, it would be helpful if the government provided soft loans to ensure business sustainability. How realistic is this? We will be able to find out about this in the near future.
Publication Date: 28.09.2022
