juillet 2, 2022

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Varadkar says companies reporting ‘big profits’ should return support money

Tánaiste Leo Varadkar said companies that have posted « big profits » or are in a position to pay « big profits » should return the money they received through the Employment Wage Support System (EWSS).

as stated in Irish TimesMr. Varadkar was responding to TD Action Good Nash during the Leader’s Questions at Dell on Thursday.

Mr Nash raised the issue after a story published in the Irish Times about O’Flaherty Holdings, which distributes Mercedes-Benz in Ireland. It is understood that the company claimed approximately 1.8 million euros in wage subsidies in 2020 and separately paid a similar amount in dividends to an outside company.

The second story described how a US multinational, which has a government contract to do driver’s license theory tests, paid a cash dividend of 1.25 million euros to a tax resident company in Malta in 2020. This was despite the company’s claim that Covid supported more than 500,000 euros in the same year. Period.

According to Mr. Nash, what was happening was « absolutely extraordinary ». Labor TD has questioned Mr Varadkar about whether the government will conduct a full audit of Covid-19 payments to businesses.

Varadkar said he would not comment on certain companies, however, « where companies are making big profits, or finding themselves in a position to pay dividends…it is appropriate that they return that cash to the taxpayer. »

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« I know some companies have done it fairly, others haven’t, and I think they should, » he added.

Mr Varadkar explained that both the EWSS and the Pandemic Unemployment Payment (PUP) were « hastily organized and designed ».

« We needed to get the money to the workers and get the money out to the companies quickly. »

‘Important security measures’

Mr Varadkar said ‘important safeguards’ have been built into the legislation to ensure that companies are properly claiming the EWSS.

“In the case of the EWSS, the qualification is based on the employer’s proof that their business has experienced a 30 per cent decrease in turnover of business or orders during the specified reference period, which was as a result of disruption related to the pandemic,” Mr. Varadkar said.

« Revenue is rigorous in its job program checks to ensure businesses are eligible for support payments under the scheme and will follow up on any instances where a business fails to qualify for the scheme, whatever the reason, » he explained.

“While the question of dividends which the company may or may not be in a position to pay shareholders is a matter outside the current legislative jurisdiction of the scheme, the Secretary of Finance wants to note that some companies have voluntarily paid some or all of the receipt of the subsidy and the revenue has instituted procedures To pay wage subsidies wherever companies want to make that happen.”

More revelations

Mr Nash highlighted that « there will likely be more discoveries over the next few days », suggesting that the EWSS should be changed to a permanent short-term business plan with conditions in place.

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He said the EWSS was never intended to « clog the pockets of big investors, » and « even Santa Claus wouldn’t be that generous. »

According to Mr. Nash, the government has been « big in terms of corporate welfare, but not great in terms of corporate liabilities ».

He added: « It is unfortunate that all we can do in this house – because this kind of behavior is illegal – all we can do is appeal to the profitable companies to return this money to the taxpayers. »

« This is unacceptable to me, and we must learn lessons from the way this scheme works. »