COVID-19 has proven to be disruptive to supply chains worldwide and has affected the financial markets too. Now that it has been declared a pandemic by the WHO, we at Data Tracks have put together a couple of key points on how it is likely to have a bearing on business in Ireland.
The worsening of the spread in Europe, specifically Italy and Spain, has made the situation take deeper root in Ireland. The government has increased its response and this may lead to a sharp jolt downwards in terms of economic activity. The home quarantine and closure of most areas of congregation have already impacted the tourism, hospitality and other supplementary industries. The reduction is spending can be seen pulling the economic curve with it. Operational difficulties are making productivity take a big hit.
The government had introduced measures to ensure that small businesses and medium size enterprises could cope with the losses and capital mobilization difficulties due to Covid-19. However, they are being criticized as being inadequate. Some measures introduced were:
- Waiver of interest on late VAT returns for Jan and Feb among SMEs
- Suspension of interest on late payments for PAYE liabilities during Feb and March
- Debt enforcement progress to be stopped for SMEs
Unlike the UK, Revenue has not introduced deferred tax payments as part of their relief efforts. It has clearly stated that it expects businesses to file their tax returns within the specified date.
Relevant Contract Tax (RCT) review to assess the current compliance position of subcontractors which was due in March has been called off by Revenue in lieu of the shortage of finance.
Revenue has, however created a green corridor for the seamless import and supply of critical pharmaceutical products and medicines.
As the hospitality and tourism industries, two pillars of Ireland’s economy suffer, the need for a specific aid package has been raised by the community. They have asked for a reduction in the VAT rate and a deferring of loan payments, both of which have not been green signalled by Revenue.
Revenue has also announced that it is pushing the date of collection for Local Property Tax for those paying through Annual Debit Instruction or Single Debit Authority. Initially sue on 21st March, the now revised date stands at 21st May 2020. This is likely to ease the burden on property owners who may be undergoing cash-flow issues due the virus epidemic.
Dublin Chamber, a business group, recently conducted a survey where it was found that 50% of companies have already taken a hit on their turnover due to the virus outbreak. Impacting the retail space, hospitality and food services sector the most, Dublin Chamber’s survey also revealed that the company size was not a factor in how the revenues were affected.
Many established businesses and corporates in Ireland have also come forward to express their displeasure in not being included for the relief programme by Revenue. If the government does not bring out more policies in the coming months, the growing uncertainty is surely to have a significant impact on the economy of the country as a whole.
Given the impact and evolving situation of the coronavirus globally, we understand the concerns and ramifications businesses must be dealing with. We take this opportunity to affirm that DataTracks is fully committed in ensuring very minimal interruption in the work and in servicing our clients. We are together in this. If you think we can be of any help, drop and email at email@example.com