Deputy O'Kennedy has been given permission to ask the Minister for Finance if the Government propose to nominate solicitors in private practice to act as solicitors to the Revenue Commissioners and if he will make a statement on the matter.
Adjournment Debate. - Revenue Commissioners Solicitors.
I am obliged to the Chair for allowing me to raise this very important matter dealing with some very fundamental issues in the legal arrangements in the office of the solicitors to the Revenue Commissioners. Everybody will recognise that we are very anxious to ensure that in every State office, including that of the solicitors to the Revenue Commissioners, the maximum degree of efficiency and productivity obtains. The fact is that due to the burden of work that has been imposed on that office, and all offices of the Revenue Commissioners, particularly in the last two years due to the increasing appetite of the Government for tax, there has been a backlog of cases as there has been in all branches of the Revenue Commissioners. Because of this the Department of the Public Service are in the process of conducting, if not concluding, an examination of the effectiveness of the Revenue Commissioners generally but, in this instance, the solicitors to the Revenue Commissioners. In fact, they have been pursuing this examination for some time. My information is that the report from the Minister for the Public Service in respect of the practices and efficiency of the office of the solicitors to the Revenue Commissioners will be available fairly shortly to the Minister for Finance.
We all recognise that it is necessary to do this important job but I am anxious to know if the Government propose, in advance of that examination being concluded, to appoint solicitors in private practice outside the Office of the Revenue Commissioners to do work that exclusively is the role of the Revenue Commissioners and their solicitors. I acknowledge that the efficiency in the office is not all that it might be in view of the importance of the work and I should like to give the reasons why this is the case. I understand that at present there are seven or eight solicitors and 16 law clerks conducting the business of the Revenue Commissioners in the office.
I invite any Member to consider how adequate such a number is having regard to the burden of work they have to discharge on behalf of the nation and the taxpayer. There are many private offices in this city with much more professional personnel than seven or eight solicitors and 16 law clerks. When one considers that the office of solicitors to the Revenue Commissioners is confined to that number, is it any wonder that we have had delays, frustration and, as will be recognised by the staff, inadequacies in terms of processing proceedings for the courts?
I understand that those 16 law clerks deal on average with something of the order of 600 to 700 files each. Any system that would pretend one could deal efficiently with that number of files is ignoring the reality. I understand that the most basic office equipment is not available to the law clerks, and, perhaps, also to the solicitors. In this day and age we find that while most of us use dictaphones even in this House that does not often claim to be well equipped with modern facilities, the law clerks in the Revenue Commissioners are confined to writing manuscript letters in respect of the legal proceedings being considered. They do not have the facility of an adequate number of tape recorders to help them to discharge their responsibilities.
In the light of all that, and the failure to provide adequate facilities, staff and overtime, it is not surprising if it is suggested that they are not coping adequately with the huge extra burden of work that has been transmitted, particularly in the last two years, from the Revenue Commissioners to the solicitors' office to take legal proceedings. In our dealings with the public most of us know of the increase in demands or threats of legal proceedings against business people who may not have sent in returns of VAT or PAYE. They have become a constant feature. For that reason the least we should do is to provide the office charged with responsibility with adequate staff, facilities and, if necessary, adequate overtime.
I should like to give some examples of the position that obtains. Apparently, no overtime is available in the office. I understand that after a question was raised in the House by Deputy De Rossa or Deputy Mac Giolla last January about delays in bringing proceedings and overdue tax — it may be a coincidence — there were 14 consecutive weeks of overtime for staff. Up to then they had been told that overtime was out of the question. That practice discontinued about two weeks ago. Overtime has been curtailed again and, as a consequence of that, and of the lack of staff, facilities and professionals, the office of the solicitors to the Revenue Commissioners is not able to cope adequately with the work. That office cannot be blamed for that position. There has been a considerable increase in the amount of work being referred by the Revenue Commissioners to that office and that is not surprising.
I should like to refer to the reason why the increase has occurred. In the last two years total tax revenue alone increased by 40 per cent, from £4,053 million at the end of 1982 to a projected £5,704 million this year. We are all aware that the figure I have given for those years does not reflect the growth in the black economy — people who are trying to evade their taxes. I am not talking about avoiding taxes because that cannot be made liable to legal sanction but where there is an actual growth of tax from £4,053 million to £5,704 million in a little over two years you can see the burden of collecting taxes due. People are trying to avoid this crushing burden which will grow enormously and each element of the machine is creaking for want of efficiency and adequate facilities to cope with this growing burden. In the same period income tax and income levies have grown from £1,491 million to £2,295 million, as astronomical increase of 54 per cent. As the world knows from OECD official records, we are at the top of the taxation league.
With the tax burden growing at that rate, perhaps it is not surprising that so many people are either failing to pay or are trying to evade their tax liabilities. It is not surprising either that many more cases are being referred to the office of the solicitor of the Revenue Commissioners to take proceedings against those who are evading or avoiding payment of their fair share of tax.
In 1980 income tax as a proportion of total tax represented 25 per cent; this year it will represent 23.7 per cent or 24 per cent. The growth in income tax in the first quarter in each year is significant but from the figures for this year we are seeing the consequence of either diminishing returns or people unable or unwilling, or both, to meet their tax liabilities. The indications are that revenue returns for the second quarter will be very far short of Government targets, and may be so far short as to warrant a mini-budget of the kind the Government said would not be necessary in their time. Those are the sad facts as they relate to income tax but let me make another point before coming back to the burden on the office of the solicitor of the Revenue Commissioners.
I am glad the Deputy realises he was some distance from that——
Out of sight.
The people we are discussing have to deal with the consequence of this growth and if this is all we are providing them with they will not be able to cope. In 1980, of total tax revenue 6.3 per cent represented servicing of our foreign debt; in 1984 that had more than doubled to 13.2 per cent and growing——
It is utterly impossible to relate that to this subject.
Let me come back to the impossible task we are asking the office of the solicitor of the Revenue Commissioners to cope with. If there is an increase in the tax take, and there has been, and if there is a considerable increase in the amount of outstanding tax, and there has been as a natural consequence of the increasing tax burden on those who are unable or unwilling to pay their fair share of tax, then there have to be adjustments in the office to try to cope. If I am wrong, perhaps the Minister will tell me but I believe it is proposed that from now on claims of less than £100,000 will not be proceeded with in the High Court. It is important to realise that a special day is set aside in the High Court list—I think it is Wednesday—to deal with cases being brought by the Revenue Commissioners.
I thought the Deputy was concerned with the appointment of further solicitors and how they were being appointed.
I am talking about solicitors who are employed at present. Perhaps the Minister would confirm if what I have said is true, or let us know if such instruction, regulation or suggestion has been made. It is vitally important to ensure that whatever tax is outstanding, whether it be £100,000, £50,0000, £25,000 or £20,000, the machinery will be there to collect that tax. If we have got to the point where anything less than £100,000 is not worth going after, then we are in very serious trouble.
My information is that in view of this enormous backlog and the inability of the office to deal with it because of lack of staff and facilities, it is proposed to appoint solicitors in private practice to do work which should exclusively be the role of solicitors to the Revenue Commissioners and that from now on proceedings for sums between £15,000 and £50,000 will be delegated to solicitors in private practice. That raises two fundamental issues. First, there is the Official Secrets Act. There appears to be a tendency to have everything published and the new land tax legislation proposes to publish lists in the Garda stations, with the taint that goes with that. It is time that we took real account——
The Deputy has dribbled a bibful.
We must take into account how confidential these matters are and how they should be dealt with. Secondly, we are not satisfied that these matters can be confidentially dealt with by people who are not subject to the Official Secrets Act. Of course, there will be a bonanza for some solicitors in private practice, but if such people are appointed, the implication will be that they are friends of the Government. If I am in Government I do not want to have the possibility of such a charge directed against me or anyone in my party. I do not want to have it said that I appointed solicitors in private practice to do the job of the solicitors to the Revenue Commissioners.
Confidentiality, secrecy and efficiency demand that what has served us well should be adequately provided for in this office. I cannot imagine that seven solicitors and 16 clerks are adequate to cope with a growing tax bill, the outstanding element of which could be anything up to £1 million. I cannot imagine that we should pass on responsibility to the private sector instead of properly applying the facilities needed in the public sector. I refer to a letter from the Director General dated 19 April, addressed to a citizen in the Curragh. It goes as follows:
I note that you have failed to furnish repayment for the above month.
The month in question was that ending 5 March 1985.
Accordingly, you have rendered yourself liable to penalty proceedings.
In addition, late payments incur interest charges equivalent to 15 per cent per annum. If you wish to avoid being selected for court proceedings, you must make the payment for this and any other outstanding months immediately. From P30 should accompany each payment.
That letter came two weeks after the amount was due, with the threat of legal proceedings. I think we need to get the thing right.
Although I should not be surprised, I am amazed that Deputy O'Kennedy has let himself fall for what I can only regard as a mishmash of garbled information which has been dribbled out him through various channels. I do not know which, but I can speculate. The Opposition Front Bench Spokesman, a lawyer himself, has allowed himself to fall for that. He cannot be doing his job. I have never heard, even from that Deputy, such misinformation and innuendo as he has just delivered himself of. I shall give a couple of examples. The Deputy alleges that amounts of tax outstanding could be as much as £1 billion, when he knows just as well as I do that the figure is nothing like that. It is nowhere near a figure of that order. He uses it cynically here to score a point, but does not himself believe that the figure is anything like that. He has done himself, his party and the House a great disservice.
The figures the Minister gave two years ago——
It is nothing short of being despicable.
Deputy, please.
The Deputy said in the House, with all the appearance of sincerity and concern, that he would never like it to be said of him that he appointed friends of the Government, friends of his, to positions under the Government.
No, a solicitor to the Revenue Commissioners.
I am not worried about that, a Cheann Comhairle. If Deputy O'Kennedy is saying that in my situation he would not be able to make up his mind, let him say that, if that is what he means. To couch it and cover it around with innuendo as he does is absolutely despicable and I suggest that it is demeaning to himself. On the question of confi-dentiality——
These are personal charges. Would the Minister deal with the facts?
I am not saying anything at all personal about the Deputy.
Demeaning, despicable? I shall keep to my standards. Let the Minister answer with the facts.
I am disappointed that a front bench spokesman of the main Opposition party should descend to tactics such as that. As to the Deputy's worries about confidentiality, we are talking here about cases that come to the courts. We are talking about cases that will be reported. There is no problem of confidentiality in relation to these cases, because they are threshed out in the courts in the public gaze, in the vast majority of cases.
It shows how little the Minister knows. Many of them are disposed of before coming to court.
These are cases any one of which can end up in court.
Can.
We are dealing with those proceedings. The Deputy has also trotted out a rumour which I heard months ago. I am amazed that he took so long. It is that an instruction has been given not to bother with proceedings for amounts of tax outstanding of less than £100,000. No such direction has been given and no such direction would ever be given by the Revenue Commissioners or by their chairman, unless they had completely taken leave of their senses. There is absolutely no truth in that rumour and the Deputy could very well have established that for himself.
I am talking about the Revenue solicitor's office, not the chairman of the Revenue Commissioners.
I will use half of my time to respond to the mischievous points raised and the remaining half to dealing with the substance of the issue.
Deputy O'Kennedy has revived the suggestion about mini-budgets and so on. He knows that there is no reason to make that kind of point here, particularly in connection with the question which he has asked me. It is totally irrelevant, as the Ceann Comhairle pointed out. He does it to create an atmosphere of suspicion and to get the innuendos going.
It is idle to pretend that any backlog of Revenue cases arose only in the last two years. As the Deputy knows, having spent a short time in the office which I now have the privilege to hold, the backlog was not suddenly invented at the beginning of 1983.
It is the extent of it that I am talking about.
Nor is it in any way accurate to suggest that the number of cases has any very direct connection with total tax revenue. In fact, the figures which the Deputy has been giving in relation to total tax revenue have no great relevance here because the Revenue solicitors do not deal with all the demands. They deal only with cases of default where proceedings are being taken.
The Minister should not waste his valuable time.
I am not wasting my time. The Deputy has dribbled several bibsful and I am going to help him to mop up. He has let himself down. The Revenue Commissioners have engaged solicitors in private practice to deal with proceedings for the recovery of sums due to the Exchequer since 1975. They were doing it even during the short period when Deputy O'Kennedy was in office.
On a point——
Order, please.
Not in High Court proceedings.
He has to wait until 13 May 1985 to find out about this.
For small issues.
I suspect that the Deputy knew, or should have known, all about this while he was Minister for Finance, but it did not suit his book to make a song and dance about it then. The Revenue Commissioners have been using solicitors in private practice to deal with cases of this kind.
Not of this kind. That is misleading. It is not true.
That is not misleading. It is a fact.
Deputy, please.
For small sums.
This is absolutely disgraceful.
A firm in Dublin does the work in the Dublin area——
The District Court, or Circuit Court maybe.
——and a firm in County Cork does the work in the Munster area. The cases which are referred to those firms are those for proceedings in the District Court and Circuit Court.
That is right.
That practice of getting private solicitors to deal with these fairly large volumes of proceedings has proved satisfactory, particularly as it has added to the capacity of the Revenue Commissioners to take proceedings against defaulters. The increase in the number of cases where the arrear is in excess of £15,000 has created a situation where an increasing number of cases must be referred to the High Court. The Revenue Commissioners are now looking at the possibility of referring some of the High Court cases——
Now the Minister is getting to it.
——to solicitors in private practice. The Revenue Commissioners have not arrived at a conclusion on that, nor, obviously, have they made any approach to me for sanction for such a proposal. I would not see any objection in principle to engaging outside solicitors simply because the jurisdiction was the High Court rather than the District Court or Circuit Court. As I have said, the Revenue Commissioners are considering the matter in relation to proceedings which come to the High Court. That is a fact which is known to the staff in the office of the Revenue Commissioners. They have been informed that that matter is being examined and that if sanction were given for such a course the Revenue Commissioners would intend to proceed along that line. For all the reasons that I have outlined, and which have been there since 1975 with the other element to which I have referred.
High Court proceedings have never been there.
I told the Deputy why the matter arises in relation to proceedings that would go to the High Court. Deputy O'Kennedy mentioned a study that is being carried out.
The Minister has not much time left.
I have not a lot more to say. Deputy O'Kennedy referred to a study being carried out by the Department of the Public Service. It is a management survey within the office of the Revenue Commissioners. They have looked at other parts of the Revenue operation. I have had some consideration of their reports and look forward to getting the results of this one.
The matter we are discussing here would have no particular relevance in that connection unless the survey were to find that all the cases could be accommodated within the existing staff resources of the Revenue Commissioner's office. I do not want to anticipate the results of that survey but I do not think they will come to that conclusion, so I would foresee that it would be necessary to examine the matter further and the Revenue Commissioners might be looking to me for sanction for the course of action they have in mind——
Or for extra solicitors for that office.
——and I will consider that matter. If the Ceann Comhairle will forgive my straying a little——
There is no time for straying, certainly.
Answer the question.
Deputy O'Kennedy used up his 20 minutes straying.
I am entitled to 20 minutes.
The point was made by Deputy O'Kennedy that many private offices have larger staffs——
Yes.
——than that in the Revenue Commissioners' office.
The Revenue solicitors.
In the Revenue solicitors' office. That is a matter for the private offices. The Revenue Commissioners have been supplementing their resources. to deal with these cases since 1975 by taking on——
It is considerably over the time.
We are not looking for a new departure here.
The Dáil adjourned at 5.32 p.m. until 2.30 p.m. on Tuesday, 25 June 1985.