Unpaid fines debt collection may be transferred to tax authority

Private sector bailiffs are tasked by the state to collect unpaid fines.
Private sector bailiffs are tasked by the state to collect unpaid fines. Source: Pixabay

The government is planning to transfer the role of collecting unpaid fines, such as those issued by the Police and Border Guard Board (PPA), to the Tax and Customs Board (EMTA), taking the task away from private sector bailiffs.

The state first started utilizing bailiffs over 20 years ago, with the argument being that as a private sector institution, they would be more effective in fulfilling their role.

Now the argument is tending towards the centralization of tasks, which will lead to reduced costs both to the state, and to debtors and others.

Centralization of state activity was set out in the coalition's action program in the spring, when it entered office, while next month Finance Minister Mart Võrklaev (Reform) is set to present findings to the cabinet.

If the government then decides to move forward with the matter, the Ministry of Finance will begin drafting required bill, though the changes themselves will take some time to percolate through.

Evelyn Liivamägi, deputy undersecretary for financial and tax policy at the Ministry of Finance, confirmed that the cost of collection will also borne by the debtor, under the new system, once it comes into being.

"Bailiffs' fees also include their own profits," Liivamägi noted. 

"But if there is one institution with one system, instead of several executors who all have to maintain their own offices, the state can also ask for a smaller sum, at its expense," she added.

Analysis thus finds that debt collection could become several times cheaper for the debtor, too, as a result.

Aleksandr Logussov, advisor at the Ministry of Justice, said: "The enforcement of state requirements would become significantly cheaper for the debtor as a result of [the changes]. The exchange of information and the quality of procedures would also improve, from a debtor's perspective."

"From the state's perspective meanwhile, it would be a good thing were the receipts of financial claims to improve, giving the state a better overview of its claims. This would also reduce the state's administrative burden," Logussov added.

Henry Timberg, head of the law enforcement and criminal policy department at the Ministry of the Interior, said now is the right time for the change. 

By digitizing criminal proceedings, various police information systems are updated in any case, he said.

The EMTA is also planning major IT developments in the coming years. "If it is decided now not to switch to a centralized system, doing so in the future would mean incurring separate costs," Timberg said.

Meanwhile Evelyn Liivamägi, undersecretary at the Ministry of Finance, said: "Perhaps in the time frame of around 2027, IT developments might be ready for this. The bill can be dealt with in 2024, however."

Bailiffs themselves however are concerned about their positions after this reform, if it comes into effect, and reject the state's arguments.

Helen Rives, head of the bailiffs' main professional body, said: "The claim that the state can be more effective than enforcers is arbitrary and not based on research, but based on superficial conclusions."

"Those who have to pay fines issued by the police do not magically become more law-abiding depending on who processes these fines, and it is in the same way not compelling to state that fines become more easy to collect due to a change in these processes."

Rives also noted that the reduction in the number of bailiffs is written into the plan.

Police claims make up about 65 percent of all claims on the bailiffs' desks, she added.

The reforms would remove around 20 bailiffs nationwide, leaving around 40 active, so the institution would still remain.

Consolidating state requirements into one institution is a thorny issue. In 2010, barely ten years after the institution of bailiffs was created in its current form, the Police and Border Guard Board (PPA) indeed proposed that the collection of unpaid fines could be entrusted to the EMTA.

Several rounds of analysis since then have all said that reform would most likely help.

n 2001, when the state took on the help of bailiffs in the first place, the belief was that the private sector was the most effective in collecting money. However, this often led to the collection of smaller sums not being worth the bailiff's time.

Over the years, EMTA has also managed environmental fees and several court claims, making it arguably suitable to take on the role.


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Editor: Andrew Whyte

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