Forum on Tax Debt Management “Tax Debt Management between a Rock and a Hard Place”

Erika Szabó's picture
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On 3-5 October 2023, IOTA had the pleasure of organising the Forum on Tax Debt Management “Tax Debt Management between a Rock and a Hard Place”, as the first hybrid event of the IOTA Work Programme 2023 autumn’s activity. The Forum took place in Budapest, Hungary, and brought together over 50 tax officials from 26 IOTA member administrations in person and more than 80 attendees digitally in order to learn more about strategies, working plans, and tailored approaches to decreasing tax debts in the period of global crises. Additionally, it was an absolute honour to welcome to the event guest speakers from our international partner organisations, the European Commission and the OECD.

The emerging geo-political situation slowly led to a new global recession, represented by economy and energy crises, high inflation, increasing costs and interest rates. Finding themselves “between a rock and a hard place”, IOTA member tax administrations are undertaking different approaches to reduce the backlog of tax debts resulting from the crises on the one hand, but on the other hand to offer support to their clients and help them overcome the payment difficulties caused by global economic crises.

One of the first activities of the Forum was a News Headlines Session with “Coffee or Tea” which offered the participants a unique opportunity to reflect briefly on the “Country tax debt management news headlines” and share their novelties in their Tax administration related to tax debt management.

The first day of the Forum featured speakers from various member tax administrations including Austria, Belgium, Estonia, Latvia, Lithuania, France, Portugal along the United Kingdom. The two IOTA member countries France and Estonia presented different approaches to reducing the backlog of tax debts in the current and forthcoming period with the following presentations:

  • Belgium: “Reducing the tax backlog: from collection strategy to artificial intelligence” presented by Felicienne Nyiboka Bokwetenge;
  • Estonia: “Flexible and improved measures in arranging instalment plans” presented by Karel Miisna & Liina Jõõts.

At the next session of the day, the need for improvements in the tax debt segmentation and risk analysis models was highlighted by several IOTA member administrations in order to apply these models as a tool for fact-based decision-making and moving in the right direction. The following countries reflected on this topic:

  • Latvia: “Taxpayer segmentation - a path to wise and effective debt management” presented by Inese Birzniece;
  • Lithuania: “Segmentation and risk analysis as main pillars supporting best-in-class modern debt collection” presented by Vitalija Burdeinaja;
  • the United Kingdom: “Customer Segmentation for Debt Collection” presented by Jayne Henderson-Hamilton.

This session was complemented by a Group session organised as a practical exercise where participants had an opportunity to work in small groups and perform tasks on tax debtor segmentation models. During the latter half of the day, speakers from the IOTA community discussed different approaches as well as expressed the need to continue the supporting measures and incentives to overcome the challenges imposed by the crises. This topic was covered by France, Portugal, and Austria:

  • France: “The French implementation of support measures to businesses in financial distress” presented by Antoine Molitor;
  • Portugal:  “Garnishments of bank accounts balances by data transmission” presented by Ana Tavares Silva;
  • Austria: “Generational Change at the Tax Office Austria: Opportunity for Fresh Air or Loss of Knowledge and Chaos?” presented by Ursula Mandak-Hütter.

The second day of the event was also filled with invaluable insights and enlightening presentations from IOTA member administrations as it opened the floor for interventions from the OECD and European Commission as well.  Under the theme of Strengthening the capacity of TDM function Greece and  Bosnia and Herzegovina (ITA) delivered presentations:

  • Greece: “Tax and Customs Academy’s (IAPR) contribution to reducing tax debts” by Ioanna Tsinti & Maria Stymfaliadou, (joining online);
  • Bosnia and Herzegovina (ITA): “Debt Management Maturity Self-Assessment and Debt Management Strengthening” by Ena Seremet.

After this session, speakers from Greece and Sweden gave an overview of the various procedural issues and unclarities in the practical implementation of debt write-offs, debt re-structuring, and pre-insolvency procedures.

  • Greece: “Implementation of the new out-of-court (OCW) debt restructuring scheme legislation by the IAPR” by Eleni Beka & Evangelia Sotiropoulou;
  • Sweden: “Deferrements and payment plans” by Erik Karlsson.

Furthermore, IOTA member tax administrations such as Poland and the Netherlands, presented their views on overcoming the challenges of the insolvency and bankruptcy procedure including cross-border insolvency

  • the Netherlands: “Alternative way of cross border tax collection - private debt collection agencies” by Paul van der Smitte;
  • Poland: “PAOE in the field of recovery of claims - Polish experience” by Iwona Banach.

Following the session, the participants divided into small groups shared their views and discussed their vision for managing the surge of insolvent and bankrupt companies in the years ahead and the methods to deal with them, during a Group discussion session.

Finally, the last session of day 1 of the Forum meeting was dedicated to an update from the international organisation on their activities in the field of Tax Debt Management. Luk Vandenberghe from the European Commission`s DG TAXUD updated the Forum participants about the activities of the European Commission for improving recovery at the national level and improving assistance at the EU level as well as assistance with third countries. Michael Roekarts, the Lead of the OECD Tax Debt Management Network (TDMN) briefed the audience on the current and future plans & priorities to enhance cooperation in the field of tax collection and recovery.

The closing day of the Forum shared new country experiences on the emerging issues in the recovery of the tax debts from assets that are difficult to recover (incl. cryptocurrency/crypto-assets) and put the IOTA member tax administrations of Norway and the United Kingdom’s presentations into the spotlight.

  • Norway: “Seize, store and sell crypto-assets – asset recovery” presented by Henning Furuhøi;
  • the United Kingdom: “Recovering Tax Debts from Assets that are difficult to recover”  presented by Mark Goodridge.

These presentations were complemented by the Hungarian Tax Administration`s (National Tax and Customs Administration, NTCA) experiences in the effective enforcement of assets deposited in digital wallets. This reflection was delivered by Katalin Kanizsai Dr (LL.M.) Expert (NTCA). Forum participants were also updated on the Forum’s subgroup Work as well as on the vision of the further steps in tax debt management activities of IOTA.

At the end of the event, the Steering Group members and the Forum attendees were actively involved in an open debate on planning the next year`s Forum meeting and sharing new (out-of-the-box) ideas on the Forum`s topics and the format along with the to share lessons learned and discussion on the main benefits of the 3-day technical activity.

All the materials and presentations are now available online and the event recording will be uploaded soon to the event’s webpage. This event was led by the IOTA International Taxation Expert Ivana Donchevska and supported by the IOTA Work Programme Manager Eugenijus Soldatkovas.