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One in three Irish firms defer tax payments due to COVID-19 -Breaking

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© Reuters. FILE PHOTO : Michael McGrath Minister of Public Expenditure and Reform presented Budget 2021 to Government Buildings, Dublin, Ireland on October 13, 2020. REUTERS/Lorraine O’Sullivan

DUBLIN, (Reuters) – Nearly one third of Irish companies deferred taxes last year. This amounts to 2.9 Billion Euros ($3.28 Billion) in total unpaid bills. The scheme was implemented by the government to keep them open during one of Europe’s most restrictive COVID-19 lockdowns.

At the outbreak of the pandemic, the government implemented the tax warehousing program. Last month, it extended the time period during which liabilities can be deferred until March 31. It also reduced the hours for hospitality venues and closed nightclubs as part of another tightening.

The scheme’s 100,900 members will not be required to pay interest until March 2019, after which they will have to repay any outstanding amount at a rate of 3.3%.

According to data from Ireland’s Office of the Revenue Commissioners, 23,000 companies are using a separate scheme for wage subsidies. The state pays the wages of 267.700 workers, or just under 10% of Ireland’s workforce.

On Wednesday, the chief economist at the finance ministry said that withdrawal of the plan scheduled for April was a threat to the economy because some firms survive on state support and could not continue being viable.

On Wednesday, Michael McGrath from Public Expenditure Ministry stated that there will be “scarring effects”.

“We are not able to determine the exact extent of damage done to businesses and industries, so it will be like applying a bandage to find out what the wound looks like.”

($1 = 0.8839 euros)

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