Ireland eases repayment terms on COVID-19 deferred business taxes
Reuters
Published Feb 05, 2024 19:40
DUBLIN (Reuters) - Ireland's finance minister said on Monday the country's tax office would not force firms to pay interest on taxes deferred during the COVID-19 pandemic and allow extra time to repay the debt once they keep on top of current liabilities.
The government introduced the tax warehousing scheme in May 2020 and firms that had deferred liabilities that arose during one of Europe's toughest lockdown regimes had already been given extra time until May 2024 to enter into repayment arrangements.
Ireland's Office of the Revenue Commissioners said 58,000 firms with 1.7 billion euros of unpaid bills were still availing of the scheme, down from a peak of 3.1 billion euros when over 100,000 companies or around one in three firms in the country had put off the tax payments.
Finance Minister Michael McGrath said the interest rate applicable to the debt will be cut to 0% from 3% and that the tax office would consider extending the repayment time beyond the typical three to five-year duration on a case-by-case basis.
"This government is acutely aware of the ongoing cost pressures faced by businesses and is determined that viable businesses are given every chance to succeed in a challenging trading environment," McGrath said in a statement.
The tax office said that 5,265 taxpayers were responsible for the bulk of the warehoused debt – 1.5 billion euros – and that almost 70% of the firms with deferred debts owe less than 5,000 euros each.
The government has faced calls to introduce other measures to help firms. The main business lobby group last month called for a pause all further statutory labour cost increases, saying the pace and scale of recent changes were leading to a rise in business failures.
Business insolvencies in Ireland rose 32% year on year in 2023, but were still below pre-pandemic levels. Accounting firm PwC, which compiled the figures, expects a similar rise in 2024 and a return to the 20-year average of annual closures.
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Written By: Reuters
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