The government on Thursday formulated a bill on the collection of physical persons' tax debts which would enable citizens to pay their tax debts by writing off interest and rolling over the principal at a 4.5 per cent interest over a period of a minimum 36 and a maximum 60 months.
Finance Minister Slavko Linic said the aim was to help citizens, who accounted for nearly HRK 18 billion of unpaid liabilities, pay their tax debt more easily.
The state claims HRK 12.7 billion from citizens, of which HRK 7 billion in principal and HRK 5.7 billion in interest.
With interest nearly identical to the principal, citizens find it impossible to pay their debts, so we propose that the entire interest be written off, said Linic.
Debtors can pay the principal at once, but since this will be difficult, the government proposes payment in monthly instalments over a period of three to five years.
The bulk of the state's claims refers to citizens whose businesses have failed, as a result of which they owe contributions for themselves and their employees, and to farmers who have been unable to pay their liabilities.
Many wish to pay their debts because of their and their employees' pensions, so writing off the interest could stimulate them to settle, Linic said, adding that the government could thus collect part of the debt and perhaps encourage someone to reactivate their business.
The 4.5 per cent interest is the lowest we could offer, whereby the government is helping citizens deal with the debt crisis, he said.
