Sensible response needed for recovery of warehoused tax debt - Louise O’Reilly TD
Sinn Féin spokesperson on Enterprise, Trade and Employment, Louise O’Reilly TD, has said that a sensible response is necessary to ensure all monies owed under the tax warehousing scheme is recovered while not putting small and medium enterprise and microbusiness at risk.
Teahcta O’Reilly said:
“The tax warehousing scheme offered businesses some respite during the height of the Covid-19 crisis. Indeed, the volume of tax warehoused under the scheme showed how much of a lifeline it was for business.
“However, we are now entering a crunch period as the majority of businesses still to repay their warehoused tax will begin to do so from January 2023 onwards.
“It is essential that Revenue and the Minister for Finance approach repayment in a manner that ensures all monies owed are repaid, but that does not push companies towards the brink of administration or liquidation.
“The Minister and Revenue should have a plan in place that delivers for the exchequer, for business, and for workers.
“The total debt eligible for the Debt Warehousing Scheme since its introduction was €31.947 billion, and as of 30 June, 91 per cent of the warehoused tax debt had been repaid.
“However, there is still €2.892 billion in tax warehoused and a Parliamentary Question provided to me outlined that Revenue have already had to write off €26.4 million from companies that have been liquidated since the introduction of the scheme. It is incredibly important that tax write-offs are kept as low as possible.
“The Department of Finance has made the prudent assumption that 25 per cent of the warehoused tax liabilities will not be repaid, i.e., that 25 per cent of the businesses that have availed of the scheme will never be in a position to repay.
“It is now up to the Department and Revenue to be flexible and work together to ensure that this figure is minimised as much as possible.
“The cost of doing business has exploded for companies as the rates for energy, fuel, materials and stock, insurance, and transport, amongst others, have risen significantly.
“This must be taken into consideration by the Minister for Finance and Revenue when working out repayment plans.
“It is better to be flexible and recover all the tax owed than to be inflexible and push companies into liquidation which would see none of the tax owed repaid.”