Dáil Éireann Debate, Thursday - 21 June 2012
35 Deputy Finian McGrath asked the Minister for Finance the number of small businesses experiencing VAT problems over the past 12 months; and the procedures in place to advise and assist these companies [30092/12]
Amharc ar fhreagraI am assuming that the Deputy's Question is focusing on the challenges for businesses in paying the VAT that is due to the Revenue Commissioners arising from their trading activities. Collection of the taxes and duties payable by individuals and businesses to the Exchequer is a matter in the first instance for the Revenue Commissioners. I am advised by Revenue that they are not in a position to say precisely how many small businesses have experienced problems in paying their VAT over the last 12 months. Businesses will deal with difficulties in paying creditors, including Revenue, in a number of different ways, including by the use of new or extended credit or overdraft facilities, or the use of invoice discounting arrangements to meet their obligation to Revenue on time. In some instance, late or non-payment may be due to unwillingness to pay as distinct from inability to or difficulty to pay. It is not necessarily the case, therefore, that a payment difficulty will manifest itself in a late payment to Revenue or that every late payment is due to inability to make payment.
The timeliness of return and payments is measured by Revenue on an ongoing basis and this provides a measure of the potential challenges for business in being timely compliant. I am advised by Revenue that in 2011 for example, 86% of medium sized businesses (those paying tax of between €75,000 and €500,000 annually) had met their VAT return/filing obligations in the month in which the obligation to file the return and make any payment arose. For the year 2012 to date that percentage has increased to 87%.
I know that Revenue has a strong focus on maintaining and indeed improving the rates of timely compliance by businesses with their tax return and payment obligations. Notwithstanding the more difficult economic circumstances in which businesses are operating at present, it is very important that businesses organise their financial affairs in such a fashion as to ensure that tax debts are paid as they fall due. This is essential not just from an Exchequer viewpoint but also because late or non-payment of tax debts puts those businesses who are timely compliant at a significant competitive disadvantage. It is clear that Revenue's focus is bearing dividends as evidenced by the high and improving timely compliance rates reported by Revenue every year.
As regards advice and assistance to business, Revenue has consistently encouraged businesses experiencing particular tax payment difficulties to work proactively with them at an early stage towards an agreed way through those difficulties so as to quickly restore voluntary timely compliance. In that regard, Revenue has published material for businesses experiencing tax payment difficulties on its website atwww.revenue.ie. I am aware that tax practitioners and representative bodies have recognised Revenue’s practical support and assistance to viable businesses.
