asked the Minister for Finance the total yield to date from the withholding tax on professional fees; the number of refunds that have been made to date; the average interval between claims and payment of refunds; and if he will make a statement on the effectiveness of the system.
Ceisteanna—Questions. Oral Answers. - Professional Fees (Withholding Tax).
9.
The total amount paid to date in respect of tax deducted under the provisions of Chapter III of the Finance Act, 1987, from payments for professional services is £17.3 million. Statistics on refunds of the tax are not available as yet but it is thought that the number of such refunds made to date is insignificant. I am satisfied with the operation of the system to date.
Arising out of the Minister's reply I would like to ask him if the figure of £17.3 million on 3 December shows that the £25 million he referred to in the budget speech is not going to be achieved. Secondly, can I ask him whether the insignificant number of refunds shows that the safeguards which he said were in existence for people who would be adversely affected by this tax simply do not work? Thirdly, can he get the other information which Deputy Cullen sought in this question and make it available to this House? We were asked on faith to implement this system on the basis that it would do no injustice and we now find ourselves in the position that the safeguards are only worked to an insignificant extent.
In reply to the last part of the question I want to say that the safeguards have worked to a significant degree.
Insignificantly.
As outlined, they have worked up until now.
How many claims have been made?
As I said, I do not have the information compiled. If it is available I will give it to Deputy Cullen or Deputy McDowell. For the purpose of reply today I do not have the information. That is the honest reply.
In relation to the yield of £17.3 million, it is expected that the overall yield in 1987 will be in the region of £21 million. We still have one month to go so this is not too far off the estimate of £25 million that was given.
Is there any breakdown available yet of the £25 million?
Yes.
Does the Minister have it readily available? Could we impose on him to give us a breakdown?
The minute the Deputy sits down I will get up and give it to him.
I apologise. I was wondering if the Minister would give it.
The Minister is a standing joke.
The information with regard to the breakdown yield to date between the different areas of service is as follows. Payments under the general medical services amounted to £7.48 million to doctors and pharmacists; payments of the Department of Social Welfare to dentists and opticians mainly were £1.75 million; payments by the Department of Agriculture and Food to veterinary surgeons mainly were £2.18 million; and payments by local authorities, health boards etc. were £5.89 million. That gives a total of £17.3 million.
It is a good scheme.
Could I ask the Minister to reiterate — if he said so already I did not catch it — whether it is the case that there have been an insignificant number of refunds or an insignificant number of claims for refunds or, if there is a difference between the two, I would be interested in knowing how many claims there were?
The Deputy is very cute.
Thank you very much, Minister.
It is thought that the number of refunds made to date is insignificant.
(Limerick East): Can I ask the Minister if he has an estimate of the total amount of refunds his Department expect to make in 1988 against the total 1987 take of £21 million which is now his Estmate?
I do not have the figures with me but if they are available I will pass them on to the Deputy.
Can I ask the Minister if he is aware of the serious financial position general practitioners in rural areas find themselves in because of the withholding tax which we have heard amounts to £7.5 million? In view of the seriousness of the position could the Minister indicate if he will make arrangements for immediate payment of the refunds due to the general practitoners?
Without going into details — and I am sure the Deputy does not want to delay the House because he wants to have other questions replied to today — there are procedures laid down in the 1987 Act and once they are complied with the refund mechanism works fast. If a taxpayer has his tax based on his previous accounting period paid up and is in excess of that figure, then he is entitled to a refund on the excess, provided he submits his claim with the appropriate form. If there are any particular cases where the Deputy feels that people who should have got refunds have not got them I would be very anxious to hear about them because I have given a commitment in this House, as Deputies McDowell and Noonan and others who were involved in the Finance Bill know, that this refund mechanism would work efficiently and effectively. If the Deputy gives me the details I will be glad to follow them up.
It is a stick-up job.
The Minister was kind enough when he replied to a supplementary question to specify in each instance who the payments were made to, for example, doctors, dentists, veterinary surgeons and so on. The final figure he gave was for payments by local authorities and health boards. I would like to ask the Minister who makes up that particular area. Could he say whether it is architects and quantity surveyors who made submissions to him during the time this tax was being implemented and if he has monitored whether or not there have been any problems with regard to firms having to lay off people as a result of this tax? Would the Minister outline the position with regard to that £5.89 million?
I do not have the breakdown the Deputy is looking for. These are payments which are made by local authorities and health boards and various other bodies including some State companies for professional services that are provided to them. The withholding tax in those instances amounted to £5.89 million.
I hope I will not be accused of indulging a self-interest but the figures do not seem to cover lawyers and I was wondering what the yield was from them.
They are beyond redemption.
I will be as joking as the Deputy. Maybe that is why the yield is down but we will catch up with the Deputy.
You have good practice at it. I was looking at the Supplementary Estimates——
Maybe they are over paid.
They are not.
It will be clawed back before 31 December.
Just wait until the Deputy sees these Estimates on Friday next. He will find that there will still be a plus at the end of the day notwithstanding the Supplementary Estimates.