The intersection of the economic cycle with the electoral cycle means that small businesses struggling to pay off their tax debts can expect another year of mostly gentle treatment from the Australian Taxation Office.The ATO announced yesterday that it will continue for another year the interest-free payment arrangements announced 13 months ago and also continue to defer the due date on tax payments in some cases.  Michael D'Ascenzo, Commissioner of Taxation, said in a speech to the Council of Small Business Summit in Brisbane yesterday that there were almost 100,000 interest-free payment arrangements in place worth $1.5 billion at present. In the corresponding speech last year he said that as at April 2009 the ATO had almost 200,000 debt cases under arrangement, worth over $2.5 billion. The more recent data relates only to those arrangements entered into under the "interest free" initiative.D'Ascenzo said the ATO granted 6,600 deferrals of activity statement payment due dates over the last year.Tax debts are rising, and at a faster pace than private sector credit.  In its 2009 annual report the ATO said that tax debts owed by business and households climbed by 12 per cent in the year to June 2009. "Collectable debt" had increased by only one per cent in 2008.The ATO late last year put the amount of collectable debt at $12.2 billion at June 2009. The ATO's stock of "debt holdings" mid last year was double the amount of collectable debt, at $24.5 billion. This figure includes disputed debt and tax owed by insolvent businesses and bankrupt individuals.D'Ascenzo said the ATO's enforcement activities this year would focus on the cash economy and make use of better data matching (often sourced from purchasing and bank records) to identify businesses that reported revenues and profit well out of line with industry norms.