Tax Collection

Dáil Éireann Debate, Thursday - 7 April 2022

Thursday, 7 April 2022

Ceisteanna (238, 239, 240)

Louise O'Reilly

Ceist:

238. Deputy Louise O'Reilly asked the Minister for Finance the volume of money warehoused under the tax debt warehousing scheme by sector. [18956/22]

Louise O'Reilly

Ceist:

239. Deputy Louise O'Reilly asked the Minister for Finance the amount of debt that has been warehoused under the tax debt warehousing scheme; the amount of this debt from microbusinesses; the amount from SMEs; and if he will make a statement on the matter. [18957/22]

Louise O'Reilly

Ceist:

240. Deputy Louise O'Reilly asked the Minister for Finance if his Department has made projections in relation to the amount warehoused tax debt that will be collected; and the amount that may not be collected; and if he will make a statement on the matter. [18958/22]

Freagraí scríofa

Minister for Finance

I propose to take Questions Nos. 238, 239 and 240 together.

The Debt Warehousing Scheme was introduced to provide a vital liquidity support to businesses suffering a downturn due to the Covid-19 pandemic. Under the scheme, businesses can temporarily ‘park’ certain tax debts on an interest free basis until the end of this year (or until 30 April 2023 for businesses most impacted by the most recent public health restrictions and are eligible for certain Covid-19 support schemes).

The scheme is automatically available to businesses and individuals that are managed by Revenue’s Business and Personal Divisions. Revenue’s Business Division manages enterprises with an annual turnover less than €3 million, which accounts for the majority of business taxpayers. Revenue’s Personal Division deals with all business entities with no trade or professional income such as trusts, charities, sporting bodies.

The scheme is available by agreement to larger businesses managed by Revenue’s Large Corporates and Medium Enterprises Divisions, where such businesses were adversely impacted by COVID-19. Revenue’s Medium Enterprises Division deals with businesses with an annual Irish turnover of more than €3 million (but less than €190 million) as well as the subsidiaries/parents of such companies. Large Corporates Division deals with the largest companies with an annual Irish turnover of more than €190 million per annum.

I am advised by Revenue that the total debt eligible for the Debt Warehousing Scheme since its introduction is €30.9 billion, and 250,000 businesses were eligible to avail of the scheme. However, 90% of that debt has been paid, with the balance of just over €3 billion warehoused at the end of February 2022 in respect of almost 97,000 businesses. This warehoused debt breaks down by Revenue Division as follows:

Division	Total (€m)
Business	1,625
Medium Enterprises	1,005
Large Corporates	392
Personal	26
Large Cases – High Wealth Individuals	6
Total	3,053

I am advised by Revenue that towards the end of this year, it will engage with all businesses availing of the scheme to agree suitable phased payment arrangements in respect of the ‘parked’ debt. The payment arrangements will be flexible and tailored to take account of the financial circumstances of each business concerned. Provided that in the intervening period tax returns are filed and current taxes paid as they fall due, and therefore a business continues to be able to avail of the Debt Warehousing Scheme, a reduced interest rate of 3% will apply to a payment arrangement.

I am advised that Revenue has not estimated the potential amount of warehoused debt that will not be paid as the expectation is that flexible payment arrangements will assist businesses in meeting their obligations over time and any payment difficulties will only become apparent in the context of the aforementioned engagement between each business and Revenue.

As the Deputy will be aware, my Department makes certain assumptions and projections in preparing the annual Budget and in that regard, Budget 2022 projections made by my Department incorporated the prudent assumption that 25 per cent of the warehoused tax liabilities are not repaid, i.e., that 25 per cent of the businesses that have availed of the scheme will never be in a position to repay. This is a conservative technical assumption but it is considered better to err on the side of caution in this matter.

The volume of money warehoused under the tax debt warehousing scheme by sector, at the end of February 2022, is as follows:

Sectors	(€m)	%
Agriculture, forestry and fishing	28	1%
Manufacturing	191	6%
Construction	368	12%
Wholesale and retail trade; Repair of motor vehicles and motorcycles	688	23%
Transportation and Storage	207	7%
Accommodation and food service activities	431	14%
Information and Communication	200	7%
Financial and Insurance Activities	61	2%
Real estate activities	70	2%

Revenue recently published updated statistics on the Debt Warehousing Scheme and this report as well as further information on the Scheme is available on the Revenue website.

Question No. 239 answered with Question No. 238.

Question No. 240 answered with Question No. 238.