The growing number of business failures has forced the Revenue Commissioners to write off over €150 million in taxes so far this year.
Revenue chairwoman, Josephine Feehily, told the Dail’s Public Accounts Committee today that the growing number of liquidations and receiverships this year has increased the amount taxes that the commissioners have had to write off.
Ms Feehily told the committee that the figure so far this year was €151 million, compared with €129 million for all of 2008.
“The number of businesses that are failing or liquidating is growing,” she pointed out.
Ms Feehily also stressed that the commissioners are willing to accommodate businesses that are having difficulty meeting their tax liabilities, and said that where companies are having problems, they should make an approach.
She added that the tax authorities do not want to endanger jobs and otherwise viable businesses if it can be avoided.
The committee heard that last year the revenue wrote off €115 million in fiduciary taxes – that is those such as PAYE and VAT which businesses have to collect from others and pass on to the Revenue – as a result of company failures.
Of that figure, between €1.5 million and €2 million was attributable to so-called “phoenix companies” established by people who liquidated businesses to avoid tax and other liabilities, and then restarted them in another guise.
In a bid to tackle this syndrome, the Revenue’s collector general’s office has established two groups who monitor businesses run by individuals who have a track record of doing this, both of which take specific action to ensure compliance.
