Government urged to extend EWSS and 9% Vat rate further than currently planned
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The Government has been urged to extend the wage support scheme for businesses and the 9% Vat rate for the hospitality sector well beyond their current scheduled end dates which were only announced last month.
In early June, Finance Minister Paschal Donohoe announced the extension to the 9% Vat rate to September 2022 and moved the end of the employment wage subsidy scheme (EWSS) out to the end of this year.
However, in a pre-budget submission, PwC has said, given businesses are likely to recover at different paces, the EWSS should be extended to the end of June 2022, with the 9% hospitality Vat rate needing to be pushed out to the end of 2023.
It also wants a reduction in the interest rate on the late payment of taxes, the relaxation of employers’ PRSI for new hires who were previously unemployed, a waiving of TWSS and PUP clawbacks for employees in certain situations and additional tax credits for people working at home.
“It would be very disappointing to see successful businesses fail just before they have had the chance to trade again,” said Nicola Quinn, a PwC tax partner.
She said the Government is to be commended for the various supports it has already provided for businesses from the beginning of the crisis — particularly privately owned companies and SMEs. However, these supports shouldn’t be phased out yet, she said.
“Despite concerns about new virus strains and the very recent further delay in the reopening of the hospitality sector, there is optimism that economic activity will bounce back,” said Ms Quinn.
“However, this will be unevenly spread with a growing fear amongst private businesses that the contingency funds and support measures will be largely exhausted as we head into 2022 and beyond. Therefore, particular attention will still be needed to continue to support our private businesses, employing some 45% of people working in Ireland.”
PwC has also called for accelerated tax write-offs for the development of regional hubs to create shared office spaces, a temporary reduction in capital gains and capital acquisitions tax rates, and an extension of CGT exemption to early-stage renewable energy projects.
It also wants less tax burdens coming into play when family businesses are being transferred to the next generation of ownership.