Business owners have criticised measures announced by Revenue today aimed at helping small and medium-sized enterprises to cope with temporary cash-flow difficulties caused by the Covid-19 outbreak.

The Restaurants' Association of Ireland (RAI) said the actions don't go a fraction of the way towards helping businesses, especially the tourism and hospitality sector.

Revenue said it will not apply interest on late VAT returns for January and February due from small and medium sized businesses experiencing temporary cash flow challenges because of the virus.

It has also suspended interest on late payments of employers PAYE liabilities during February and March.

But the tax collection agency said businesses should continue to send in their tax returns on time, meaning the measures do not amount to permission to defer payment of taxes.

"It is essential that businesses experiencing temporary cash flow difficulties continue to send in their tax returns online," Revenue said in a statement to RTÉ News.

"The payment due date for January/February VAT returns is 23/03/2020. We expect businesses that are not adversely affected to pay and file, however the application of interest on late payments for all SMEs is suspended for January/February VAT returns."

The tax agency also announced that debt enforcement activity for SMEs is suspended until further notice.

Tax clearance status will remain in place for all businesses over the coming months.

In relation to subcontractors, Revenue said the review of the Relevant Contract Tax (RCT) that was supposed to take place in March has been suspended to prevent subcontractors from having to pay more at this time.

The review was due to assess the current compliance position of subcontractors and determine their  RCT deduction rate.

On the issue of customs, Revenue said critical pharmaceutical products and medicines will be given a 'green routing' to facilitate uninterrupted importation and supply.

"Currently, thousands of workers are being laid off as we speak," said Adrian Cummins, CEO of the Restaurants Association of Ireland.

"A specific aid package for the Tourism and Hospitality sector need to be in place by Monday morning."

The organisation wants the VAT rate to be reduced immediately to 9% for hospitality businesses for at least 6 months.

A moratorium on VAT payments is also being sought as well as a halving of employers PRSI.

It is also asking Irish banks to defer loan repayments for at least 6 months.

Revenue said that if firms who are not SMEs are experiencing temporary cash flow challenges, they should contact the Collector-General's office or discuss their situation with branch contacts.

It said it will continue to monitor the situation and will issue further updated guidance for businesses when necessary, particularly in time before the March/April VAT returns and when other future returns are due.

Other businesses backed the view of the RAI that more is needed.

"While any and all help to businesses at this time are welcome, today's announcement from Revenue is nowhere near enough in terms of relief for the hundreds of businesses the length and breadth of the country that are already facing staff layoffs and closures as a result of the economic shut-down which will occur due to Covid-19," said Marc O'Dwyer, CEO of Big Red Cloud.

"The measures announced today are primarily about deferring the payment of liabilities to Revenue. Whilst that is helpful in the short term, the taxes will still be expected to be fully paid."