DUBLIN (Reuters) – Ireland's finance minister said on Monday that the country's tax office will not force companies to pay interest on taxes deferred due to the impact of the COVID-19 pandemic and will reduce current liabilities. He said he would give the company additional time to pay down its debt if it could be maintained.
The government introduced a tax warehousing scheme in May 2020, giving businesses that had already deferred debt incurred during one of Europe's toughest lockdown regimes additional time to prepare for repayments until May 2024. was given.
The Irish Revenue Service says 58,000 businesses with unpaid invoices of €1.7bn are still using the scheme, but more than 100,000 businesses in the country, or around one in three, have postponed their tax payments. This is down from a peak of 3.1 billion euros. .
Finance Minister Michael McGrath said the interest rate applied to debt would be reduced from 3% to 0% and the tax office would consider extending repayment terms beyond the usual three to five year repayment period on a case-by-case basis. Then he said.
“The government is acutely aware of the continuing cost pressures facing businesses and is determined that viable businesses are given every chance to succeed in a challenging trading environment,” Mr McGrath said in a statement. Stated.
The tax office found that the bulk of the warehoused debt (€1.5 billion) was borne by 5,265 taxpayers, and that almost 70% of companies with deferred debt owed less than €5,000 each. Stated.
The government faces calls to introduce other measures to support businesses. Last month, major business lobby groups called for a moratorium on further rises in statutory pay costs, saying the pace and scale of recent changes were leading to an increase in bankruptcies.
Business insolvencies in Ireland rose 32% year-on-year in 2023, but remained below pre-pandemic levels. Accounting firm PwC, which compiled the numbers, expects a similar increase in 2024, with annual closures returning to the average of the past 20 years.
(Reporting by Padraic Halpin; Editing by David Evans)
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