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Dáil Éireann debate -
Wednesday, 17 Feb 1988

Vol. 378 No. 1

Ceisteanna—Questions. Oral Answers. - Consolidated Income Tax Act.

6.

asked the Minister for Finance when the updated Consolidated Income Tax Act will be introduced.

As I have already informed the Deputy in reply to a previous parliamentary question which he put down on this subject, a considerable amount of work would be involved in the consolidation of the Income Tax Act, 1967, and the related provisions of the 26 Finance Acts subsequently enacted. A consolidation measure would also, ideally, embrace the capital gains tax and corporation tax legislation.

The Deputy will also be aware that in my Budget Statement of 27 January last I announced that the Government are undertaking a number of fundamental changes in tax assessment and collection procedures. These changes include the introduction of key steps to facilitate the move towards a scheme of self-assessment, the integration of the collection of levies and PRSI from the self-employed into the new system, an incentive measure for taxpayers to bring their tax affairs up to date and important alterations in the corporation tax code.

The limited resources of the Revenue Commissioners are at present fully committed in the preparation of the legislative and administrative measures needed to implement these proposals, proposals which will require significant changes in procedures both for taxpayers and the Revenue authorities and which will constitute, perhaps, the most radical improvement in the administrative system since the introduction of PAYE nearly 30 years ago. In these circumstances, the Revenue Commissioners have been unable to allocate the necessary senior staff to continue the work of consolidation and, accordingly, no commitment can be given as to when the consolidated Bill is likely to be introduced. In any event, the major changes to which I have already referred and which will be put in place over the next few years should be reflected in any legislation to consolidate the income tax, capital gains tax and corporation tax provisions. To attempt a meaningful consolidation while these changes are taking place — even if this were possible in the context of limited resources — would be premature.

Would the Minister not agree that the labyrinthine series of statutory provisions now contained in 26 Acts passed by the Oireachtas since 1967 have rendered the income tax code virtually incomprehensible? Will the Minister also agree that the changes he is proposing to make will create further difficulties in understanding the intricacies of the income tax code and that these changes make it even more urgent that a codified income tax law be published? I would ask the Minister to give this matter considerable priority following the enactment of this year's Finance Act.

We must first overcome the administrative details involved in this year's budget and perhaps next year's budget. It is important that any consolidation of the 1967 legislation and the subsequent Acts should also include the reforms which are taking place now. The scarce resources should be used for implementing the recently announced changes. That is the way it will proceed. I would hope that the question of consolidation would not be put altogether on a back burner.

Would the Minister accept that senior staff would be better employed in rationalising the tax code rather than being made redundant by his Administration and taking up employment in the private sector as consultants, with the task of finding loopholes in the very legislation which they constructed?

I do not accept what the Deputy says, as prompted by Deputy Desmond.

(Interruptions.)
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