Fergus O'Dowd (Louth, Fine Gael)
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233. To ask the Minister for Finance if he will respond to concerns and proposals raised by a person (details supplied) in respect of the current tax demands in what is an extremely difficult climate; and if he will make a statement on the matter. [8781/23]

Michael McGrath (Cork South Central, Fianna Fail)
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One of the primary functions of Revenue is the collection of tax and ensuring that all taxpayers pay the correct amounts due in a timely manner. The majority of taxpayers want to do the right thing and file and pay their taxes on time, and do not require notification from Revenue to pay outstanding debts. The time limit for filing a VAT return for taxpayers who file and pay through Revenue’s on-line facility (ROS) is the 23rd day of the month following the end of each taxable period.

As the Deputy is aware, during the COVID-19 pandemic, Revenue suspended debt enforcement in line with the Government’s introduction of the Debt Warehousing Scheme which provided a vital liquidity support to businesses experiencing cash-flow and trading difficulties due to the pandemic. Under the scheme, businesses were able to temporarily ‘park’ certain tax debts on an interest free basis. In view of the current difficult economic climate, the period during which these debts can remain ‘parked’ has been extended to May 2024. Importantly also, businesses will still be able to avail of the reduced 3% interest rate from 1 January 2023, as opposed to the general interest rate of 10%, when they come to pay the debt. Almost 67,000 individual entities are availing of Debt Warehousing to the value of €2.3 billion. Consequently, these debts are not subject to current debt collection or enforcement action. However, to remain eligible for the Debt Warehousing Scheme, in addition to filing all returns for the warehouse periods, current liabilities must also be filed and paid on time.

During 2022, Revenue commenced a phased return to standard debt collection for non-warehoused debt which had been partially suspended since the start of the pandemic in March 2020. As part of Revenue’s standard debt collection procedure, where current taxes become overdue, a request for payment will issue with details of the tax(es) due, requesting payment within a set timeframe. The request for payment outlines the consequences of continued non-payment and affords the taxpayer up to 10 days to engage. In the absence of customer engagement, a final demand issues allowing another 7 days for the customer to engage. Where there is continued lack of engagement from the customer in response to these notices, the case is escalated for further action.

Generally, on receipt of a 7-day final demand, the majority of taxpayers take action to resolve their payment difficulty. Revenue encourages taxpayers to engage early when payment difficulties arise, particularly during the current energy costs crisis. Revenue only refers outstanding tax liabilities to its enforcement agents, including Sheriffs, as a last resort. Before any such action is taken, Revenue makes every effort to engage with the taxpayer to resolve the situation. Revenue has a strong track record of successfully working with individuals and businesses to resolve their payment difficulties. For example, taxpayers can enter into a Phased Payment Arrangement to pay off their debt in instalments over a period of time. Furthermore, Revenue has introduced a number of flexibilities into its payment arrangements to assist businesses, including reduced down payments, longer repayment periods and the option to take a payment break.

The important message for taxpayers is to engage with Revenue at the earliest opportunity so that a mutually acceptable solution can be found to enable them work through their difficulties. I am assured that Revenue appreciates the challenge for businesses in paying their outstanding liabilities in a difficult economic and financial climate and Revenue is committed to finding solutions which are flexible, and which take account of the financial circumstances of the business concerned.