Michael Ring
Question:17 Mr. Ring asked the Minister for Finance if he is satisfied with the operation of penalty and interest rules for different categories of tax evasion that were unearthed by the Revenue Commissioners. [18687/04]
View answerWednesday, 23 June 2004
Questions (36)
Written answers
I am advised by the Revenue Commissioners that the operation of penalty rules on the different categories of tax evasion is as set out in their code of practice for Revenue auditors. It was updated in August 2002.
Interest is levied on overdue tax in accordance with the relevant provisions of the Taxes Acts. The current rate of interest is 0.0322 % for each day or part of a day from the date when tax becomes due and payable until payment is received. It is equivalent to an annual rate of approximately 11.75%
Civil penalties are generally 100% of the tax underpaid where the taxpayer negligently makes an incorrect return or in the case of fraud, twice the amount of the tax due. The Revenue Commissioners may, at their discretion, mitigate any penalty in accordance with section 1065 of the Taxes Consolidation Act. The section imposes restrictions on the mitigation of penalties for periods within the scope of the 1993 amnesty. Interest due is not mitigated.
The code of practice for Revenue auditors sets out its approach to the mitigation of penalties. The level of mitigation is based on the category of default that gave rise to the penalty. Further mitigation for a prompted or unprompted qualifying disclosure and for co-operation with the audit may also be available.
The penalty regime outlined in the code of practice is being followed in the current investigations into NIB, Ansbacher, bogus non-resident accounts and offshore accounts.
The Revenue powers group made some proposals for the reform of the interest and penalties regime. Last February I published the report. I indicated that I would consider the group's recommendations in the context of the Finance Bill 2005 and allow for a period of public debate and reflection.