Dáil Éireann Debate, Thursday - 1 February 2024
128. Deputy Martin Browne asked the Minister for Finance if his Department is considering measures to support businesses with the increased cost of doing business through the taxation system; and if he will make a statement on the matter. [4609/24]
Amharc ar fhreagraThere are already a number of measures in operation in the tax system that support businesses in Ireland, including those facing increased costs of doing business.
The Tax Debt Warehousing Scheme has offered valuable and practical liquidity support to businesses during the COVID pandemic and continues to support businesses as they recover from the impacts of the pandemic and the cost of living crisis. It has helped prevent business failure by assisting businesses with their cash-flow during difficult trading periods.
Introduced in May 2020, the scheme allowed businesses to temporarily defer certain tax liabilities on an interest-free basis for an extended period of time. After this period, a 3% interest rate has applied and will continue to apply until either the debt is repaid or the customer otherwise exits the scheme. Businesses have until 1 May 2024 to either repay their warehoused debt or make arrangements with Revenue to repay the debt over an agreed timeline based on their individual circumstances.
I have engaged with Revenue with a view to examining where further flexibility might be given to businesses in repaying warehoused debt. This work is underway by Revenue and my Department and I hope to make a further announcement on this matter soon. In the meantime, as always, where taxpayers are finding it difficult to meet their tax payment obligations the advice remains to engage with Revenue as soon as such difficulties start to arise so that an agreed solution can be found.
I have also been proactive in supporting SMEs by introducing or improving a number of taxation measures which help small businesses to access investment, scale-up and expand. Measures include the Employment Investment Incentive (EII), the Key Employee Engagement Programme (KEEP), the Revised Entrepreneur Relief and the new relief targeting angel investors. These tax incentives have undergone significant change in recent years following feedback from stakeholders, in particular the SME community. I am committed to continuing to review and adapt these schemes as necessary, to ensure they are effective.
Another business support measure that I provided for in Budget 2024 is an increase in the Research and Development (R&D) tax credit from 25% to 30%. While this increase is relevant to businesses of all sizes, it will be of particular benefit to smaller companies outside the scope of the new Pillar Two rules introduced with effect from end-2023.
Finally, the increasing complexity of the tax system is a concern frequently raised by businesses, particularly smaller businesses with more constrained resources, and I have committed to making efforts to simplify the tax system where possible. As part of this initiative, I have committed to introducing a participation exemption for foreign sourced dividends in Finance Bill 2024. The detailed development work will continue over the coming months and it is intended that, when operational, the participation exemption will provide administrative and competitive benefits for businesses operating in Ireland.
