Kieran O'Donnell (Fine Gael) | Oireachtas source

People and business associations are asking us questions also. I apologise for missing part of the meeting but I want to refer to the issue around cashflow for business. The biggest change this will bring about, apart from the timing in terms of getting physical goods in or whatever, will be to cashflow. I refer to businesses being required to come up with a comprehensive guarantee. One of the reasons we were going for authorised economic operator designation was that it could exempt them from the comprehensive guarantee where they are required to have money available in a bank account, which is money they have tied up, so to speak. Businesses are asking if there are circumstances in which they would not be required to provide a guarantee. I refer in particular to the cashflow implications for small and medium enterprises which import goods.

Mr. Cody spoke about getting a scheme that allows business to trade. Let us say I operate my business on the basis of giving customers 60 days' credit and they are getting 60 days' credit from suppliers. Historically, many businesses importing goods from countries outside the EU obtained credit terms that were not as good as those provided in the EU. In many cases, money was sought upfront. In addition, under the old system, they had to pay VAT at the point of entry and could not get goods out of the warehouse without paying the VAT. Let us take the case of a small business that imports goods valued at €100,000 each month. It will be liable for €23,000 of VAT per month. Under the guarantee system, this business would have to have €56,000 in a bank account and may even have to pay the money upfront. The credit terms may tighten in terms of its purchasing power. How can we ensure that businesses can continue to trade? If they have a very good record with Revenue in terms of their general compliance in terms of payments, what can we do to ensure they would not be required to go into the guarantee scheme? Does Mr. Cody understand the question?