Need to ensure 'hidden debt' does not hinder SME post-Covid recovery - Louise O'Reilly TD
Sinn Féin spokesperson for Enterprise, Trade, and Employment, Louise O'Reilly TD, has said that there is a need to monitor the current situation for SMEs and to ensure that ‘hidden debt’ does not affect their ability to bounce back to profitability in the medium-term, post-Covid.
Speaking this morning, Teachta O’Reilly said:
“From speaking with many small and medium enterprises (SMEs) and family businesses, there is a fear that ‘hidden debt’, such as warehoused tax debts and commercial rent arrears, could hinder their ability to bounce back to profitability when we exit the current crisis.
“Data revealed to me by the Minister for Finance has shown that SMEs have warehoused over €1bn in tax liabilities under the Debt Warehousing Scheme, a support scheme for businesses affected by Covid-19 restrictions.
“This scheme is incredibly important for SMEs, microbusinesses, and family businesses. It has improved short-run cashflow for these businesses, however, the government must ensure that the level of tax debt that is being warehoused does not affect their ability to bounce back to profitability in the medium-term, post-Covid.
“SMEs are the backbone of our economy, especially in terms of employment, so the fact they have warehoused more tax debt than any other sector is a concern.
“The government needs to look at this specific issue and assess the sort of structures that may need to be put in place for businesses to bounce back, and for people to re-enter employment, as we exit the crisis.
“I know that many businesses have suggested solutions, such as repayment of tax debt over an elongated period or reduced interest rates, which would ease the burden of these tax liabilities and ensure they can bounce back as we exit the Covid crisis.
“However, as is ever the case in these situations, a two-way dialogue between business and the state will inevitably uncover the most workable solution for both parties.
"I would encourage the Tánaiste and Minister for Enterprise, Trade, and Employment, and the Minister for Finance, to begin these conversations immediately.”