Dáil Éireann Debate, Wednesday - 21 April 2021
468. Deputy Pádraig O'Sullivan asked the Minister for Finance if the operation of the stay and spend incentive will be reviewed and extended beyond April 2021; and if he will make a statement on the matter. [18433/21]
View answerThe purpose of the Stay and Spend Tax Credit scheme was to provide targeted support to businesses within the hospitality sector whose operations are likely to be most affected by continued restrictions on public health grounds.
The scheme was developed at a time when there appeared to be a steady downward trend in infection rates and there was an expectation that the re-opening of the economy could be sustained uninterrupted. Unfortunately, this has not been the case and, with the exception of some short periods, public health restrictions have had the effect of impeding the operation of the incentive as originally envisaged.
The Stay and Spend scheme is scheduled to terminate at the end of this month. While I am very mindful of the significant difficulties that remain to be faced by the hospitality sector, I have made the point previously that the broad interests of taxpayers also need to be taken into account and that these may not be best served by extending the scheme over the summer months in circumstances where we will all be staying at home and hopefully holidaying in Ireland. This is particularly the case when other very significant support measures will remain in place. Taking these factors into account, it may be more appropriate to take stock again in a number of month's time and assess if the position needs to be reconsidered at that point.
It may be useful to summarise the significant supports that remain available to support businesses generally, including the hospitality sector:
- In recognition of the unprecedented challenges facing the Hospitality and Tourism sector, the VAT rate was reduced from 13.5% to 9% from 1 November 2020. This is a temporary but important measure to provide support to the sector, where many businesses remain closed for now and those that are open are operating at significantly reduced capacity. It will apply until 31 December 2021. It should be noted that this VAT rate reduction came after the introduction of the Stay and Spend Tax Credit and reflects the fact that the latter was not intended to be the sole sector-specific support for hospitality.
- In addition, the Employment Wage Subsidy Scheme (EWSS) continues to be a key component of the Government’s response to the COVID-19 crisis to support viable firms and encourage employment in the hospitality and tourism sector and beyond. I have been clear that there will be no cliff-edge to the EWSS and, as announced by Government last month, the scheme is being extended in its enhanced form to the end of June 2021.
- The Covid Restrictions Support Scheme (CRSS) is a targeted support for businesses significantly impacted by restrictions introduced by the Government under public health regulations to combat the effects of the COVID-19 pandemic. The support is available to companies, self-employed individuals and partnerships who carry on a trade or trading activities, the profits from which are chargeable to tax under Case I of Schedule D, from a business premises located in a region subject to restrictions introduced in line with the Living with COVID-19 Plan.
- Finally, businesses may also be eligible under the Debt Warehousing Scheme to ‘park’ certain VAT and PAYE (Employer) liabilities, excess payments received under the Temporary Wage Subsidy Scheme (TWSS), outstanding balances of self-assessed Income Tax for 2019 and Preliminary Tax for 2020.
