Louise O'Reilly (Dublin Fingal, Sinn Fein)
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244. To ask the Minister for Finance the amount of debt still warehoused under the tax debt warehousing scheme; the amount of this debt per division; and if he will make a statement on the matter. [14901/23]

Louise O'Reilly (Dublin Fingal, Sinn Fein)
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245. To ask the Minister for Finance the amount of warehoused tax debt that that has been repaid to date; the amount of tax foregone due to companies entering liquidation or administration; the projections on the total tax that will be foregone due to liquidations or administrations; and if he will make a statement on the matter. [14902/23]

Michael McGrath (Cork South Central, Fianna Fail)
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I propose to take Questions Nos. 244 and 245 together.

By way of background, the Debt Warehousing scheme allows for the deferral of the payment of VAT, PAYE (Employer) and certain self-assessed income tax liabilities, including TWSS and EWSS overpayments. It provided a vital liquidity support to businesses during the COVID pandemic and continues to support businesses as they recover from the impacts of the pandemic and the current energy crisis. A significant extension to the scheme was announced in October 2022 with the commencement date for repayment of the debt extended to 1 May 2024 from the original repayment date of 1 January 2023.

I am advised by Revenue that the total debt eligible for the Debt Warehousing Scheme since its introduction is €31.9 billion, with over 250,000 businesses eligible to avail of the scheme. As at end February 2023, almost 93% of that debt has been paid, leaving a balance of €2,257 million in the warehouse for almost 65,000 individual entities. In addition, almost 2,000 warehoused customers have agreed installment arrangements for warehoused debt of €68 million using Revenue’s flexible phased payment facility.

The scheme was 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 was also available on application to larger businesses managed by Revenue’s Large Corporates and Medium EnterprisesDivisions, where such businesses have been adversely impacted by COVID-19 and included a small number of individuals in Revenue’s High Wealth Division. 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.

The value of debt warehoused at the end of February 2023, broken down by Revenue Division, was as follows:

The extension announced in October 2022 means that businesses no longer have the challenge of making arrangements to repay their warehoused debt until 1 May 2024 and this significant additional time should greatly support businesses and prevent business failure. Importantly also, businesses are still 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.

However, it remains a key condition of the Debt Warehousing Scheme that current liabilities are filed and paid on time. Revenue is actively engaging with businesses in the scheme to ensure they are complying with this key condition in order to retain the benefits of the scheme. Where payment difficulties arise, particularly in relation to current tax obligations, I am assured that Revenue will work proactively with businesses who engage early to resolve these payment difficulties. Revenue has a proven track record in agreeing flexible Phased Payment Arrangements to allow for the repayment of debt over a period of time.

To date, a total of 510 companies who were eligible for the warehousing scheme have been subject to liquidation with total tax debt of just over €55 million, of which €50 million had been warehoused. Revenue is not in a position to say exactly how much tax will be foregone in the future due to liquidations or administrations.

Revenue’s expectation is that the extended timeline to 1 May 2024 for entering into arrangements for repaying warehoused debt, together with flexible payment arrangements, will assist most businesses to work through any difficulties and will satisfactorily address the repayment of their tax debt, including any warehoused debt, over an acceptable period of time.