Portugal writes off €1Bn in taxes

Portugal’s tax authorities have written off more than €1Bn in taxes pertaining to 2020.

The debts, which are those seen as “unrecoverable”, will only add to the total amount of outstanding taxes which tax payers either cannot pay, have been rescheduled in instalments or postponed.
At the end of 2020, the Autoridade Tributária had classified €7,401 million in debt as “unrecoverable”.
This amount represents an increase to €1Bn for 2019 and 2020 according to numbers in the State General Accounts 2020 (Conta Geral do Estado 2020) which have been delivered by the government to the Portuguese parliament.
In total, the accumulated value of revenues that are still outstanding, meaning the deadline for their voluntary payment has already expired, is now just over €22,000 million by the end of 2020, increasing by €882 million (+4.2%) compared to the end of 2019.
This stock of outstanding debt corresponds to over a half of the tax revenues received in 2020 (€43,000 million).
Of this total, 33.6% corresponds to overdue taxes that are classified as unrecoverable. This classification is down to various factors: the tax payer or their family in question doesn’t have pawnable goods, the taxpayer can’t be identified or found, the amount has been outstanding for more than 12 months and with proof of impairments and attempts to collect it.
The tax most responsible for unrecoverable debts is VAT (€2.9Bn), followed by the category ‘Others’ (€2Bn) and then IRC (€1.4Bn).