Written Answers. - Tax Amnesties.
Ivor Callely
Question:
99
Mr. Callely
asked the
Minister for Finance
if he will give details of the tax amnesties introduced over the past five years and the amount received under these amnesties; if he has satisfied himself that amnesties of this nature are beneficial; and if he will make a statement on the matter.
There have been three amnesties in the last five years.
The 1988 tax amnesty applied to those taxpayers who brought their affairs up to date by 30 September 1988. The following table contains the information requested, in so far as it is available, on the revenue received by the Revenue Commissioners in 1988 on foot of the tax amnesty and related factors.
|
Tax Head
|
£m
|
|
Income Tax (excluding PAYE)
|
190
|
|
PAYE
|
75
|
|
PRSI
|
35
|
|
Corporation Tax
|
49
|
|
VAT
|
77
|
|
Capital Gains Tax
|
18
|
|
Levies
|
53
|
|
Total
|
497
|
The 1991 amnesty, relating to Capital Acquisitions Tax and Estate Duty, produced £13 million. It applied to those taxpayers who brought their affairs up to date by 30 September 1991.
An amnesty is at present available in respect of Stamp Duty liabilities. It applies to documents executed before 1 November, 1991. All interest and penalties for the late payment of duty on these documents will be waived if the duty is paid by 30 June, 1992. From 1 July to 30 September, 1992, interest and penalties will be partially waived.
To date, about £3.5 million has been paid in approximately 2,800 cases. The estimated yield for the amnesty is £10 million and the Revenue Commissioners expect to meet that estimate by the end of September, when the amnesty will end.
Tax amnesties are not generally desirable. They involve substantial concessions to taxpayers who may be significantly in arrears with the payment of tax or to taxpayers who have evaded some or all of the tax that they owe. This is most unfair to compliant taxpayers. In addition, the grant of one amnesty may lead to an expectation that another may be introduced at some stage in the future and so may damage compliance.
The three amnesties that have been introduced were, therefore, conceded most reluctantly and only because major reforms were being introduced in the law and the administration of the taxes in question — reforms, in the case of the 1988 amnesty, such as the power of attachment and increased auditing, which have ensured that non-complying taxpayers have faced a more hostile cli- mate than has been the case prior to their introduction. It was the Government's view that these reforms could not be implemented successfully:
—if the Revenue Commissioners had to run for some considerable time into the future, the new system of Self-Assessment side by side with an old system requiring continued detailed examination and assessment of all relevant outstanding cases; and
—if taxpayers affected by the new system were not given the opportunity to "come clean" at its inception.
In these very particular circumstances, the 1988 amnesty was necessary to ensure the success of the reforms that were being introduced; otherwise, they would not have been put in place. Similar considerations applied in the other cases also.
