Interest cut on overdue taxes welcomed by lobby groups
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BUSINESS lobby groups last night welcomed the Government's move to cut interest rates on overdue taxes by 20pc, but said the new lower rates were still "punitive" and well above international norms.
The commentary came after Finance Minister Brian Lenihan announced that Revenue's late payment penalties were being cut from an annual rate of 10-12pc to an annual rate of 8-10pc.
Mr Lenihan described the new rate, which kicks in on July 1, as a "means of alleviating pressure on businesses at a time of considerable economic difficulties".
But the Small Firms Association (SFA) and the Irish Taxation Institute (ITI), who jointly called for reductions in the statutory interest rate earlier this week, last night stressed that there was more to be done.
In the more damning of the two commentaries, SFA boss Patricia Callan said while she "welcomed" the reduction, rates of 8-10pc were still "punitive" when compared with rates of between 1.5 and 2.5pc in the UK.
"It is essential that the Minister for Finance and the Revenue really accept that they have a role to play in supporting small business survival rates by increasing the amount of liquidity in the system," she added.
"[This] will allow businesses to pay each other and thus remain in business, rather than paying the Revenue at all costs and going out of business ultimately."
ITI boss Mark Redmond, meanwhile, described the interest rate cut as a "help to firms struggling to stay on top of tax payments", but said he would "encourage the Government to continue its support for business by continuing to cut the rates to bring them back in line with market rates."
- Laura Noonan
