Vol. 476 No. 6
70 Mr. E. Byrne asked the Minister for Finance if he has satisfied himself with the efficiency of the tax collection system from the farming and self-employed sectors in view of the most recent household budget survey figures showing a disparity in disposable income between PAYE and farming households; and if he will make a statement on the matter. [7878/97]
I am satisfied, on the basis of the trend in tax receipts and my detailed discussions with the Revenue Commissioners, that the efficiency of the tax collection system for all sectors of the economy has improved significantly in recent years. The Revenue Commissioners are continuing with their overall successful approach to compliance which is designed, on the one hand, to make procedures easier for those who are trying to meet their tax obligations and, on the other, to pursue people who do not pay on time or at all. Measures taken to improve collection and compliance include modern payment methods including direct debits, programmes to secure returns from those who do not file, the large-scale targeted audit programme which resulted in some £129 million being collected in 1996, the random audit programme which exposes every taxpayer to the risk of audit, introduction of withholding tax and tax clearance procedures, significant use of the power to attach assets of tax defaulters, as well as other strong enforcement measures, new local collection and arrears compliance initiative, measures to tackle black economy operators and a more active prosecution policy in cases of serious evasion.
Revenue have confirmed that these measures, which are to be intensified under its new corporate plan, are underpinning the improved compliance in the tax system in recent years. The measures needed are reviewed each year on the basis of Revenue's analysis of the returns and levels of compliance for that year.
Conclusions on tax compliance are difficult to draw from the disposable income figures emerging from the household budget survey, which are compiled on a different basis by the CSO. These disposable income figures would, for example, include certain State transfer payments which do not come into the computation for tax purposes.
I would point out that from 1991 to 1996 the contribution of the farming and other self-employed sectors as a percentage of the aggregate take from these two sectors and the PAYE sector increased from 10.2 per cent in 1991 to 13.5 per cent in 1996. The latter figure would have risen to 14.1 per cent but for the once-off cash flow cost, estimated at £35 million, of the High Court decision to allow withholding tax on professional fees to be offset against an individual's overall liability to income tax on a current year basis.
