Dáil Éireann debate -
Wednesday, 8 Oct 1997

Vol. 481 No. 2

Written Answers. - Outstanding Taxes.

Michael Noonan

Question:

23 Mr. Noonan asked the Minister for Finance if he has discussed with the Revenue Commissioners the criticism by the Comptroller and Auditor General of their management of the collection of outstanding taxes in his report of 15 September 1997; the steps, if any, which will be taken to improve the collection of outstanding taxes; and if he will make a statement on the matter. [15689/97]

Ruairí Quinn

Question:

65 Mr. Quinn asked the Minister for Finance if the Government intends to address the concern at the non-collection of £1 billion in taxes by the Revenue Commissioners as highlighted in the recent report by the Comptroller and Auditor General; the measures, if any, he intends to put in place to address this issue; and if he will make a statement on the matter. [15682/97]

Minister for Finance (Mr. McCreevy)

I propose to take Questions Nos. 23 and 65 together.

Contrary to the impression given in some press reports, the recent report of the Comptroller and Auditor General expressed general satisfaction with the results of his examination of the Office of the Revenue Commissioners.

While the Comptroller and Auditor General did identify shortcomings in some aspects of remittance processing and information analysis on the tax debt, I am informed by the Revenue Commissioners that in many instances these shortcomings in long-standing procedures had been identified by Revenue's own internal reviews and that corrective action had already been initiated. The Commissioners are confident that their ongoing computerisation programme will address these issues.

On the overall management of the debt, the Comptroller and Auditor General has expressed broad agreement, subject to adequate safeguards, with the new approach being followed by the

Commissioners in regard to the write-off of old uncollectible arrears.

The bulk of these old arrears are unreliable estimates from the pre-self assessment era. There is also a substantial element that relates to companies that have ceased trading. By elminating the need to divert resources to debts that are uncollectible, a more focused approach can be maintained on arrears that are collectible and also on current taxes.

Significant progress has already been made through actual collection and write-off in appropriate cases. The total of outstanding taxes has fallen from £3.5 billion in 1989 to £1.69 billion in 1997. The outstanding debt, much of which is not collectible for the reasons I have mentioned, now represents 15 per cent of annual total taxes collected as against 57 per cent in 1989 and much higher percentages in earlier years.

I have had discussions with the Revenue Commissioners and fully support their approach to tax collection as set out in their corporate plan for the period 1997 to 1999. That approach involves promoting voluntary compliance by improving services to taxpayers and simplifying tax administration as much as possible while, on the other hand, taking tough measures as appropriate.

As part of the overall strategy, Revenue have set themselves the objective of reducing the historical arrears of tax by £1 billion over the period of the plan.