Tax workers taxes will continue to receive 5% of the amount raked in this year by ‘coercive collections’ - tax foreclosure proceedings.
The percentage again was set at the maximum 5%, as in previous years, as the government shies away from threatened strike action from members of the Tax Workers Union.
The commission rate for Finanças staff is set annually after an evaluation of performance against targets and overall tax department objectives.
The government statement today rambled on about "the high standard of professionalism that employees of the Tax Office have demonstrated, the availability of multiple channels of access to taxpayers and traders and an increase in productivity 2013" and used this to justify this year’s 5% commission based on what should be the procedure of last resort.
Ironically, in the light of recent failures in the Finanças’ web portal, the Ministry of Finance also highlighted the "continuous monitoring and improvement of monitoring supported by computer systems," which claims to have "contributed significantly to the increase in tax revenue, exceeding the objective set out in the business plan."
The very suspicion that the government was to cancel this payment caused a strike notice from the Tax Workers Union so the government continues to offer tax office staff an inventive to ignore more reasonable settlement options in favour of coercive collection methods.
The coercive tax collection machine had the dubious honour last year of collecting the most money in the history of this often brutal and inflexible enforcement method.
Those on the receiving end cite intolerance, inflexibility, Finanças staff’s refusal to enter into sensible discussions as Finanças office employees share 5% of the proceeds and have a perverse incentive to expedite coercive ‘solutions’ rather than agree other more fitting options that could keep businesses running and householders in their houses.
Some companies that have sought protection under the Special Revitalisation Process, established to enable insolvent companies to seek shelter from their creditors while negotiating solutions, have blamed the entrenched stance of Finanças for the failure of negotiations with creditors. Tax department staff on 5% of money recovered may see little benefit to their own pay packets in allowing a company to trade out of problems and may prefer to liquidate any available assets and receive 5% of the amount realised in a fire sale.
The fact the government wants to stop this 5% commission may not be due to an enlightened attitude to the country's debtors, but the reason it does not cancel these iniquitous performace-based payments is its own weakness in dealing with a well organised union.
