(Cavan-Monaghan) asked the Minister for Finance if he is aware that a firm (details supplied) in County Cavan, a wholly Irish undertaking which took over another failed company and saved many jobs, is having serious difficulty regarding the payment of sub-stantial interest on VAT in respect of accounts which are still outstanding due to normal trade credit.
Ceisteanna—Questions. Oral Answers. - County Cavan Firm.
7.
I have been so informed by the Revenue Commissioners. The firm's difficulty does not arise from VAT but apparently from trade credit terms afforded to customers. A solution could not therefore be appropriately sought in the VAT area. While the Revenue Commissioners have approached the present case sympathetically, no trader could realistically expect that he be allowed to solve what are essentially trading problems at Exchequer expense by a practice of undue delays in payments of tax.
(Cavan-Monaghan): I assume that the Minister is aware that this firm's predecessor went out of business with a loss of 120 jobs, that a number of local people took over the undertaking and saved 105 jobs, and that they are giving normal credit terms, but because they are forced to pay VAT before they receive payment for their goods in the ordinary course of credit, they are charged a substantial amount of interest on the VAT. Would the Minister be prepared to take steps to waive the interest? That is what is involved in the question.
There is more than that involved. The Revenue Commissioners cannot undertake to waive permanently interest on VAT because if they were prepared to do it in this case they would have to be prepared to do it in all other cases. They have tried to assist this firm within the constraints that apply to the Revenue Commissioners and have made helpful suggestions. The basic problem for this firm is that they give long terms of trade credit, and it may be that, having regard to the fact that their customers are entitled, on receiving an invoice, to claim the amount of VAT due off their liability, the firm could insist on a shorter period of credit at least in relation to the VAT they are charging on the invoices. This would get over their difficulties to some extent.
(Cavan-Monaghan): Is the Minister aware that in order to stay in business this firm have to give attractive credit terms? They have to fight the importation and virtual dumping of foreign baths here, and they also have to compete with the placing of contracts by Government Departments for housing schemes, with foreign firms, and that all these things make it very difficult for this firm to carry on. If the Minister would either give them the interest-free VAT, prevent dumping, or insist that public contracts are placed with Irish firms this firm would not have some of the problems they have.
As the Deputy is well aware, the question of dumping or the placing of public contracts, presumably by local authorities and/or agencies under the Department of the Environment, is not a matter for me and I cannot, therefore, comment on the Deputy's statement. My lack of comment is not to be taken as an acceptance of the statement made by the Deputy. I am concerned with the VAT liability. I am sure the Deputy appreciates that we cannot tailor the VAT system to suit the circumstances of individual firms and as I have pointed out, the difficulties that arise for this firm do not benefit the Exchequer but rather they benefit their customers. I have suggested one method that might be of some assistance and the Revenue Commissioners have made suggestions which could be of assistance, but the Deputy must appreciate that the solution to the problems of this firm cannot be found within the VAT system which has to be a general system applying to all taxpayers.
(Cavan-Monaghan): Would the Minister have a look at the matter again in the light of the information I have given him?
I will certainly, but I would not like to hold out too much hope. The Deputy has not given me information which would enable me to change the position, but I will have a look at it again. Perhaps there is something hidden in what the Deputy says that I did not see.