asked the Minister for Finance the total amount collected to date from the youth employment levy/ youth training levy; the total amount outstanding in respect of these levies from (a) farmers and (b) self-employed at the latest date for which figures are available; the steps which are being taken to ensure that outstanding amounts are collected; and if he will make a statement on the matter.
Ceisteanna—Questions. Oral Answers. - Employment and Training Levy.
9.
Liability to the employment and training levy, as it is now termed, took effect from 6 April 1982. The total amount collected from the levy up to the end of 1987 was £462.5 million.
The employment and training levy due from full time farmers was collectible by the health boards for the tax years ended 5 April 1983 and 5 April 1984. The Revenue Commissioners are responsible for collecting the levy from part time farmers and other self-employed persons for those years, and from all farmers and self-employed for subsequent years.
The total amount of arrears, as at 30 September 1987, owed by full time farmers to the health boards, who remain responsible for the collection of these arrears, was £3.9 million. I am informed by the Revenue Commissioners that at 31 December 1987, a total of £64 million was outstanding, £16.3 million from farmers and £47.7 million from other self-employed persons, in respect of the years for which the commissioners are responsible. This total of £64 million is an estimate and on the basis of previous experience that amount will be subject to downward revision on closer examination, on appeal and for various reasons. Likewise, the amounts outstanding to the health boards are based on initial assessments of income, and it is expected that the arrears will be reduced on production of actual accounts, and on appeal.
In addition to the usual billing procedure, most of the health boards, in an effort to recover outstanding arrears of the levy, have also instituted legal proceedings.
I am informed by the Revenue Commissioners that demands and reminders are issued regularly to those who are liable to the levy. The commissioners say that the level of inquiry about the incentive scheme to bring tax affairs up to date, which I announced in my budget speech, leads them to expect improvement in the collection of these arrears in the current year.
I also announced in my budget speech, in relation to the reduction of the flatrate VAT refund to farmers, that I would consider restoring the refund rate, currently at 1.4 per cent to 1.7 per cent next year, provided that the problem of all levy arrears is resolved satisfactorily through the co-operation of farmers.
There has been a lack of effort on the part of the Minister and his Department to collect these levies. The amount outstanding, according to the Minister, at 17 June 1987 was £52.1 million of which £40.2 million was owed by the self-employed and £11.9 million by farmers. The figure has now gone up to £64 million with £47.7 million owed by the self-employed and £16.3 million owed by farmers. In June 1987 the amount owed to the health boards was £4.5 million and this has only been reduced by £1 million. Can the Minister tell us why these levies are not being collected at a time when those in the PAYE sector, whose earnings are an open book, cannot afford to pay for health services? Can the Minister tell us why no determined or vigorous effort is being made to collect these outstanding levies particularly at this time when people are hungry in this country?
I do not know what the Deputy means by his last remark but I agree with him when he says that it is appalling that such a large amount of these levies is still outstanding but I can assure him that every effort is being made by the health boards to collect them. Legal proceedings have been instituted in a number of cases, and also by the Revenue Commissioners, in order to collect these arrears. As has been pointed out on numerous occasions, the total figures given are only estimates and it is no harm to put the matter into perspective. The amount likely to be collected by the Revenue Commissioners out of the total of £64 million is approximately £12 million, £9 million from the self-employed and £3 million from farmers. The health boards are likely to collect about £1 million. The amount of employers' and employees' contributions outstanding from employers is £117 million of which we expect to collect £46.7 million.
There is a vast difference between the amounts outstanding and the amounts likely to be collected. The question which arises is why are these moneys not being collected?
I do not know whether the Deputy listened to my reply but I said that the total figure of £64 million is an estimate and on the basis of previous experience that amount will be subject to downward revision following appeals and because of various other reasons as people submit their accounts.
(Limerick East): Would the Minister not agree that both he and the Government are involved in a total charade against the background of figures for uncollected levies in now seeking to extend PRSI to farmers and the self-employed? It is not clear from the Minister's figures that a 90 per cent collection rate would be required to break even in the new PRSI scheme and that the collection rate revealed by the figures given by the Minister is less than 35 per cent?
The Deputy is injecting new matter into this question.
(Limerick East): The question relates to the collection of arrears and I would like to say that there is no point in imposing new levies if you will not be able to collect them.
The Deputy is also adverting to new levies.
(Limerick East): Giving extra benefits on the basis of uncollectible levies is a charade and nonsense and the Minister should not proceed with it.
We must proceed by way of a question.
Let me remind the Deputy that we are talking about the arrears, as far as the health boards are concerned, for 1983 and 1984. The Deputy had much more responsibility then than he has now. I would also like to inform the Deputy and the House that the only person who has taken any action on this question and tried to put some order into this matter, particularly from a farmers' point of view, is myself. In the budget of last year I reduced the rate of VAT refund from 2.4 per cent to 1.7 per cent and this year I reduced it from 1.7 per cent to 1.4 per cent, in the process bringing in a total of £16 million.
(Limerick East): The Minister is now involved in writing IOUs which will result in the taxpayer paying out in excess of £700 million over the next decade on the basis of PRSI payments which he will not be able to collect.
I am calling on Deputy Colley.
If they do not pay they will not be able to qualify.
(Limerick East): They are qualifying already.
Deputy Colley has been called.
(Interruptions.)
(Limerick East): The Irish taxpayer will be paying out £700 million in ten year's time and the Minister will not be able to collect the levies.
Can the Minister give us the numbers of the self-employed and farmers, both full time and part time, who owe this enormous amount of money and whose taxes are outstanding?
I am sorry, I do not have the figures but if they are available I will send them to the Deputy.
The Revenue Commissioners are experiencing difficulties in handling the number of cases involved. They have to do so literally by hand rather than computer. I am aware that there are moves to computerise the system but if we increase the number of people from whom various levies will have to be collected——
The Deputy is making a statement rather than asking a supplementary question.
As Deputy Noonan has already said, that debate will continue in 45 minutes from now and those points can then be made. As a result of the action which the Government have taken over the last 12 months on the question of arrears and in extending PRSI, as envisaged in the legislation going through the House at present, appropriate administrative arrangements will be in place to ensure that we will have more success than we have had over the past six or seven years.
Would the Minister agree that the fact that a return of income will now be required before an estimate can be sent out will ensure that the type of loaded and facetious question which has been asked consistently by The Workers' Party will not be asked in the future? We agree that there are some arrears outstanding from the self-employed and from farmers.
The Comptroller and Auditor General, members of the Committee of Public Accounts and other Deputies have referred to that matter on many occasions during my time in this House. Because the figures are only estimates they tend to be inflated and are subject to downward revision.
Question No. 12.
A Cheann Comhairle——
We have dwelt on this question for some time but if Deputy McDowell and Deputy Mac Giolla will be very brief I will hear them.
I have a very brief question for the Minister. Can he tell us what interest is payable on arrears? I think there is none.
It is only right to say in regard to that question that there have been disputes for quite some years over the payment of these levies, particularly with the farming organisations and that these have been resolved satisfactorily only during the last number of weeks, rather than months.
If there is no interest, it costs nothing.
As I said in my initial reply, the incentive scheme introduced in the budget will lead to the payment of not only these health contributions and employment levies but also income tax and other taxes. Penalties are now attached to the other taxes. We hope that by the end of this year the problem will have been put behind us and, as Deputy Cowen has rightly said, the new selfassessment procedure will result in more factual assessments of income as compared with heretofore.
Will you charge interest?
Why did the Minister not give this type of information when the Bill was being discussed this morning?
What Bill?
In view of the figures which the Minister gave this morning and the figures he has given now as to moneys owed to the health authorities and to the Revenue Commissioners on youth employment levies and health levies, does he regard it as facetious of us to ask questions in relation to this at a time when our health services are being cut back?
This is leading to argument. Let us have the next question please.
(Interruptions.)