People who cannot afford to pay overdue income tax and social security contributions can settle their dues over a period of 18 months as the government moves to continue recouping an estimated €665 million it is still owed.
A scheme launched last September gave people the chance to settle their dues and benefit from a 90 per cent discount on the fines and interest accrued over the years. About 31,000 people benefitted from the scheme, giving the government over €43 million in unpaid tax arrears.
Finance Minister Tonio Fenech said people complained they did not have enough cash to pay in one lump sum, prompting the government to offer a second "follow-up" scheme, giving them the chance to settle the outstanding balance over a maximum of 18 months.
He criticised banks for turning down clients who went to them to borrow the amount they needed to pay in tax but, at the same time, understood that banks usually lent money for new investment not to pay taxes.
The scheme was also being extended to cover those, mostly employers, who fell behind in paying their workers' social security contributions.
Mr Fenech said it was estimated that about €570 million were owed to the government in income tax arrears and €95 million in income tax and national insurance payments. There were 9,035 employers or individual taxpayers who still owed the government money.
The balance includes €258 million issued as estimates because of lack of documentation.
Mr Fenech explained that the amnesty covered taxpayers who had pending dues up to year of assessment 2009 and employers who had fallen behind in their income tax and social security contribution between 1998 and 2009.
Under the scheme, individual taxpayers had two options: settle all the tax owed by October 31 in one lump sum and benefit from a reduction of 85 per cent on penalties and interest or else pay in instalments, with a 30 per cent down payment and the rest over a period of 18 months. In this case there would be a 75 per cent reduction on penalties and interest.
Employers who had fallen behind with their income tax and social security dues between 1998 and 2009 also had two options. They could either pay all their dues by October 31and benefit from a reduction of 90 per cent on fines and interests or make a 30 per cent down payment and settle the rest over 18 months and have fines cut by 80 per cent.
Mr Fenech warned that if taxpayers did not fulfil their commitments in payments of instalments, fines and interests would have to be paid in full.
Asked about the taxpayers' charter, promised in the last Budget speech, Mr Fenech said work on it was progressing, adding that it was planned to be published in the pre-Budget document so it could be discussed.