Dáil Éireann debate -
Wednesday, 19 Nov 1997

Vol. 483 No. 1

Written Answers. - Tax Yield.

Proinsias De Rossa

Question:

95 Proinsias De Rossa asked the Minister for Finance the average amount of tax paid by a PAYE worker, a self employed person and a farmer for the most recent year for which figures are available; if he has satisfied himself that these payments are consistent with the income levels for each group; and if he will make a statement on the matter. [19665/97]

Minister for Finance (Mr. McCreevy)

The latest relevant information available on income tax receipts is in respect of the calendar year 1996. The average individual tax payment from each of the PAYE, farming and other self-employed sectors in 1996 is estimated at £4,308 for PAYE, £1,028 for farmers and £4,020 for other self-employed.

I am satisfied, on the basis of trend in tax receipts and from the information supplied by the Revenue Commissioners, that these payments are consistent with the income levels for each group. 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 as follows:

(1) modern payment methods including direct debits;

(2) programmes to secure returns from those who do not file;

(3) the large-scale targeted audit programme which resulted in some £132.6 million being collected in 1996;

(4) the random audit programme which exposes every taxpayer to the risk of audit;

(5) introduction of withholding tax and tax clearance procedures;

(6) significant use of the power to attach assets of tax defaulters, as well as other strong enforcement measures;

(7) new local collection and arrears compliance initiative;

(8) measures to tackle black economy operators and

(9) a more active prosecution policy in cases of serious evasion.

Revenue have confirmed that these measures, which are to be intensified under Revenue's 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.

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.