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Dáil Éireann debate -
Wednesday, 27 May 1992

Vol. 420 No. 4

Séamus Cullimore

Question:

96 Mr. Cullimore asked the Minister for Finance if he has satisfied himself with the amount of money recovered by the tax sheriffs.

Pat Lee

Question:

49 Dr. Lee asked the Minister for Finance if his attention has been drawn to the fact that a number of Revenue Sheriffs have failed to comply with operational guidelines, by placing in interest earning deposit accounts sums of money which should have been remitted to the Collector General in the month following collection; if he will make a statement on the incidence of this practice; and if he will outline the steps he is taking to end this abuse.

Michael Joe Cosgrave

Question:

41 Mr. Cosgrave asked the Minister for Finance if he will outline (1) the remuneration of Revenue Sheriffs and (2) the plans, if any, he has to change their system of payment.

Tom Enright

Question:

31 Mr. Enright asked the Minister for Finance the amount of revenue collected by Revenue Sheriffs in the country as a whole in each year since the use of such sheriffs was applied nationally.

Nora Owen

Question:

17 Mrs. Owen asked the Minister for Finance if, in respect of the 1991-1992 tax year, he will outline (1) the amount of revenue collected by Revenue Sheriffs which has been remitted to the Exchequer (2) the amount which has been placed in interest-earning deposit accounts by the sheriffs and (3) the value of the demands in the hands of sheriffs and awaiting collection.

Proinsias De Rossa

Question:

16 Proinsias De Rossa asked the Minister for Finance if, arising from the recent report of the Comptroller and Auditor General, he will outline (1) the reasons ten sheriffs, who withheld millions of pounds due to the State in 1990, were allowed to retain interest earned on these sums and (2) the changes, if any, he intends to make in the regulations regarding the holding of such money in order to ensure that any interest earned will accrue to the Exchequer; and if he will make a statement on the matter.

Written Answers. - Revenue Sheriffs Deposit Interest.

Charles Flanagan

Question:

100 Mr. Flanagan asked the Minister for Finance if he will give details of the amount of deposit interest earned in 1991 by the State's 16 revenue sheriffs in respect of moneys held on account for the Collector General; if he has satisfied himself with the practice whereby revenue sheriffs earn considerable sums of money at the expense of the State, by virtue of moneys collected being placed on deposit; and if he will make a statement on the matter.

I propose to deal with Questions Nos. 16, 17, 31, 41, 49, 96 and 100 together.

I am informed by the Revenue Commissioners that £91 million in outstanding taxes was collected by sheriffs in 1991. The figures for previous years are: 1990, £74 million; 1989, £79 million; 1988, £100 million; 1987, £49 million; 1986, £30 million.

In addition an estimated £100 million was paid direct to the Revenue Commissioners in 1991 after initial action by the Sheriffs. The direct impact of their operations in 1991 will therefore be the collection of at least £190 million and the indirect effects, though unquantifiable, are likely to be substantially greater. The actual liability is settled in over 70% of the cases referred to the Sheriffs.

There are at present 84,000 warrants in the hands of the Sheriffs awaiting collection. The estimated face value of these is £263 million. However, in many instances the amounts are estimated because of non-response by the taxpayer and, in practice, the estimates will be displaced by actual liabilities of lesser amounts.

£14.92 million was held on deposit by the Sheriffs at 31 December 1991 which represents about 16% of the amount paid annually to the Sheriffs. I have no information as to how much of this was held in interest bearing deposit accounts nor how much interest was earned on such accounts.
Prior to 1986 collection of outstanding taxes was done by the Sheriffs in Dublin and Cork. Elsewhere it was done by the County Registrars. In practice, the salaried County Registrars were ineffective because of the burden of their other official duties. Between 1986 and 1987 new Sheriffs were appointed in the areas outside Dublin and Cork with the exclusive function of collecting outstanding taxes and interest.
The Sheriffs are officers of the Courts who carry out debt collection work on a professional basis. The Revenue Commissioners are their clients and in the case of the Dublin and Cork Sheriffs, share access to their services with others. The remuneration of Sheriffs is governed by the Sheriffs Fees Orders 1926 to 1963 under which a Sheriff is entitled to 35p in respect of every certificate lodged with him and poundage of 5% on the first £100 plus 2.5% on the balance collected. Expenses for travel and seizure are payable in certain circumstances. The fees, expenses and poundage are payable by the defaulting taxpayer. As is the norm in financial transactions between solicitor and client they have at all times been permitted to retain interest on short term deposits. In effect, this interest has been a major source of their income. The operation would have become non-viable had they not been permitted to supplement their income with such interest to defray the substantial costs they incur.
The Revenue Commissioners lay down guidelines concerning the transmission of money collected and the vast bulk of the money is transmitted within the time limits laid down in these guidelines. Due to the overwhelming response to the 1988 Tax Amnesty it was not possible to immediately implement more detailed reporting arrangements which were developed with the co-operation of the Sheriffs in 1988. Implementation of the revised guidelines commenced in 1989. It took some time for all the Sheriffs to set up the computer systems needed to implement the guidelines in full and for the Revenue Commissioners to set up the appropriate monitoring arrangements. Consequently, a number of Sheriffs breached the guidelines in 1990. However, the number of breaches of the guildelines reduced considerably in the latter half of 1990 and the situation improved even further in the course of 1991. Detailed statistics are not available of all instances in which money was not transmitted to the Revenue Commissioners as specified in the guidelines, in the month following that in which the Sheriff received full payment of the amount due. The Revenue Commissioners are satisfied, however, that the amounts involved in these circumstances are not significant in the context of the overall amounts collected, both directly and indirectly, by the Sheriffs. There is no statutory basis for re-claiming from Sheriffs the interest earned on money held on deposit outside the terms of the guidelines.
My Department has recognised for some time past that the traditional practice whereby Sheriffs retain the interest earned on money collected pending payment to the Revenue Commissioners was not satisfactory. A review of the statutory fees is in progress and I will be making recommendations to the Minister for Justice shortly for revised scales of fees. Once these fees have been improved to a realistic level, Sheriffs will no longer be permitted to retain interest on amounts held pending transmission to the Revenue Commissioners.
Notwithstanding the defects of the current system of remuneration, Sheriff action is, from the point of view of the Exchequer, the quickest and cheapest of the options available for the collection of outstanding taxes and is therefore a very important part of the tax collection process.
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