The new Irish Tax Institute president wants the Inland Revenue to offer more support to companies that need to start paying off stored tax debts in January.
Olm Browne, director of taxation at PWC, said it’s important that companies get approval from tax officials for “realistic” payment plans as they not only deal with the recovery from the pandemic, but also with high energy costs, wage pressures and rising input prices would have .
“There will be an intense battle of revenue with taxpayers over the coming months and it is important that we are able to agree on reasonable, realistic tiered payment arrangements that take into account not only the impact of the pandemic but also the difficulties many SMEs are facing in the very challenging economic environment,” he said at the institute’s annual general meeting on Thursday.
The 84,000 companies currently enrolled under Revenue’s tax debt storage program will be contacted by officials over the next month to make phased payment arrangements ahead of the December 31 end of the interest-free period.
After that, for the duration of the program, the companies must start paying back debts of 2.8 billion euros at 3 percent.
Mr Browne said he wanted to see Revenue take a “pragmatic” approach to approving these plans to protect the SME sector at a vulnerable time.
“Protecting the indigenous sector will be really important given the vulnerabilities that have been outlined in relation to Ireland’s reliance on multinationals,” he said Irish Independent.
To date, very few companies have voluntarily set up payment plans with Revenue to begin paying back taxes that Revenue has deferred in 2020 and 2021.
Just 343 companies have entered into tiered payment agreements with Revenue and paid off €11 million of stored debt, according to the latest Revenue statistics on the program.
“Businesses need to get back on their feet, but the SME sector is under tremendous pressure,” said Mr Browne.
“It’s understandable that they would stay in the storage system rather than dive into the reserves to pay it back.”
One obstacle for struggling small businesses with stored tax debt is the requirement to make a large down payment of 25 percent or 40 percent of the total as part of a multi-year payment arrangement.
“That’s going to be a big challenge in the current environment,” said Mr. Browne. “We have to think about this requirement. That’s where commitment becomes be key.”
https://www.independent.ie/business/irish-tax-institute-president-calls-for-revenue-to-be-lenient-about-warehoused-debt-41974262.html The President of the Irish Tax Institute calls for the Inland Revenue to be lenient with stored debt