(Limerick West) asked the Minister for Finance the total amounts spent on computers for the Revenue Commissioners in each year since 1980, inclusive and if he will outline the technical difficulties, if any, which prevent the Revenue Commissioners from utilising this computer equipment to give income and income tax averages for the various categories of self-employed, on an up-to-date basis.
Written Answers. - Revenue Commissioners Computer Spending.
47.
My Department have not incurred any expenditure in the years since 1980 on the provision of computers for the Revenue Commissioners. The total of amounts spent by the commissioners on computing, that is, hardware, software networking and consumables, in each of these years is as follows: 1981, £1,935,690; 1982, £2,504,575; 1983, £2,901,729; 1984, £3,604,033; 1985, £4,105,000 (provisional).
The production of statistical information by the Revenue Commissioners is heavily dependent on computer equipment at this stage. Tables 88 and 89 of the sixty-first annual report of the Revenue Commissioners, prepared for the year ended 31 December 1983, set out for each vocational group the numbers of taxpayers involved and the average income assessed for each group. These tables also indicate the numbers in each group for various ranges of income assessed. Reliable information cannot be furnished on a more up-to-date basis because it takes a number of years to finalise the tax computations for business undertakings. Most assessments are estimated in the first instance and such assessments are then appealed by taxpayers. The extraction of statistical information before most of the appeals have been settled would lead to very unreliable and misleading results.
In classifying cases into vocational groups it is necessary to decide on the main occupation because in many instances the people concerned have multiple income sources. The attribution of tax paid on the basis adopted for tables 88 and 89 would not be satisfactory because the tax attributed to some professions could be very much overstated while the tax yield from other sources would be correspondingly understated. There are no technical difficulties preventing the Revenue Commissioners from utilising the computer equipment for the extraction of information showing average income tax payments by vocational sector but considerable software development would be required, individual items of income would have to be calculated and coded by reference to the nature of the business activity from which the income is derived and considerable extra staff resources would be needed for the input of information to the computer, information which would have no bearing on the computation of the taxpayers' liabilities. The information on average tax which would thus become available would be of limited value and would have to be used with great care to avoid double counting of taxpayers. It must be accepted that the main task of the Revenue Commissioners is to collect revenue. Requests for statistical information, which cannot be obtained from Revenue records without considerable elaboration of the recording and processing procedures, cannot be undertaken on grounds of costs especially at the present time when the primary aim is to reduce administrative costs.
For historical reasons additional information has become available in relation to farmers because farming, as such, became a taxable trade only in 1974-75 and until 1983-84 this trade of farming had been the subject of a special tax regime. Special computer codes had to be introduced to distinguish different categories of farming catered for in the special regime and specialised farming districts and units within districts were set up by the Revenue Commissioners to deal with farmers' liability to tax. Consequently the commissioners have been able to provide accurate estimates of the tax yield from farming and information as to the average tax payment by farmers in the years concerned. Further analysis of individual cases would enable the commissioners to furnish estimates as to the numbers of farmers who had actually paid tax in a given year but such information could not be provided for all vocational groups for back years and could be provided for them in the future only by incurring considerable extra costs. The commissioners have been reluctant to incur additional costs in extracting statistical information about farmers which cannot for cost reasons be made available for all other groups.