€26.4m in tax liabilities warehoused during the pandemic under a Revenue scheme have been written off because the companies concerned have been liquidated.
That's according to details released to Sinn Féin’s Enterprise spokesperson, Louise O’Reilly, by the Minister for Finance through an answer to a parliamentary question.
In total, debt that was eligible for warehousing under the measure reached €31.95bn from 256,000 businesses.
As of June 30, 91% of liabilities had been paid back, the minister said in his response.
The total amount of tax still warehoused under the scheme stands at €2.892bn, with 88,000 firms involved.
Louise O’Reilly said a sensible approach to dealing with the outstanding money owed is needed from Revenue and the Government, so small and medium sized businesses are not put at risk during the recovery of the money.
"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," she said.
"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."
She added that it is also incredibly important that tax write-offs are kept to a minimum.
The Government’s Stability Programme Update includes an assumption that 25% of the monies owed will not be repaid.
"Businesses in the scheme are obliged to contact Revenue before the end of December 2022 (or April 2023 in the case of those eligible for the extension) to make arrangements for the payment of warehoused debt," the Minister for Finance said in his response.
"This allows Revenue and the taxpayer to devise a repayment plan over an agreed duration, taking into account the taxpayer’s particular circumstances."
"The time frame given to businesses to repay warehoused debts will be negotiated as part of the agreement and will take account of all relevant factors including ongoing liabilities and ability to repay."