Tax Collection

Dáil Éireann Debate, Wednesday - 22 February 2012

Wednesday, 22 February 2012

Questions (4)

Michael McGrath

Question:

4Deputy Michael McGrath asked the Minister for Finance the position regarding the recent initiative by the Revenue to ensure tax compliance among pensioners following on from the 150,000 letters issued by the Revenue in early January 2012; if he will confirm the number of the 150,000 pensioners that it is now believed have an extra tax liability; if he will confirm if the Budget day estimate of an extra €45 million revenue in 2012 from the initiative is still accurate; and if he will make a statement on the matter. [10183/12]

Oral answers (5 contributions)

Deputy Brian Hayes

I refer the Deputy to the reply to Parliamentary Questions Nos. 81 to 83, inclusive, of 12 January 2012. It was never expected that 150,000 pensioners would have extra tax liabilities. In that reply I stated the Revenue Commissioners had advised me that in some cases the pensioners were paying too much, in others too little and that others would be exempt.

I am advised by the Revenue Commissioners that they have amended the records of those persons in receipt of Department of Social Protection pensions in 2012 with the most up-to-date information received from that Department. This ensures these taxpayers will pay the correct amount of tax this year on all their known income sources. In addition, the Revenue Commissioners advise that they have issued tax exemption certificates to the employer and pension providers of some 15,000 taxpayers whom they believe will be exempt from tax in 2012, even with the full Department of Social Protectin pension taken into account. Furthermore, the Revenue Commissioners state they will shortly automatically review the tax position of a further 20,000 taxpayers to ensure they did not overpay tax in 2011.

The Revenue Commissioners also advise that for the past number of weeks since taxpayers received the letters in question, they have been updating their records with information supplied on foot of direct contacts by the taxpayers where they, until now, did not have the most complete and up-to-date information available to them. Furthermore, at the meeting of the Joint Committee on Finance, Public Expenditure and Reform on 11 January the chairman of the Revenue Commissioners indicated that additional analysis had to be carried out and that work was still ongoing.

The Revenue Commissioners further advise that discussions with groups representing pensioners are ongoing and that they will be in a position to publish a number of additional "frequently asked questions" by the end of the week. Regarding the budget estimate of additional yield, I am advised by the Revenue Commissioners that the estimate of €45 million for additional liabilities due is still valid.

Deputy Michael McGrath

It was stated at the time the 150,000 letters were issued to pensioners by the Revenue Commissioners in early January that it was estimated 115,000 of the 150,000 pensioners would have an extra tax liability. I had hoped that by today the Revenue Commissioners would have given the Minister of State an up-to-date picture of the compliance initiative and where it stood for the pensioners concerned. Pensioners in my constituency have come to me with the letter they received. Many of them were told in the letter that they had an extra tax liability but on investigation it was clear to me that they certainly did not. That was subsequently confirmed on inquiry with the Revenue Commissioners. Many pensioners were unnecessarily frightened by the letter issued in early January. The information I am seeking - if it is not yet available, perhaps the Minister will indicate when it is likely to be available - is how many of the pensioners who received the letter will actually have an extra tax liability in 2012.

Deputy Brian Hayes

My officials advise me that a P35 contains the basic information given to the system by employers who each year inform the Revenue Commissioners and the social welfare system of the total amount of tax paid. We cannot give the Deputy the information because we do not have access to the P35s for 2012. Obviously, that information will come in. I understand the Revenue Commissioners will have some indicative figures in the coming months on the key question asked by the Deputy. However, it is not possible to give them because the P35s are not in. When they are, we will have more knowledge.

Deputy Michael McGrath

Contact has been made by the pensioners with the Revenue Commissioners to clarify their individual circumstances. As the chairman of the Revenue Commissioners advised the committee a number of weeks ago, thousands of pensioners have been in contact with the Revenue Commissioners by telephone and making inquiries at offices of the Revenue Commissioners. In many of these cases the information was provided, the position was clarified and it was confirmed that the pensioners concerned had no extra tax liability. We should be given information on the actual position as soon as possible. Some 20,000 pensioners were believed to be owed money by the Revenue Commissioners. Has this yet been processed? Many pensioners were advised that they should complete Form 12 in respect of their return in 2011, but that form is not yet available from the Revenue Commissioners. I hope that matter will be attended to without delay.

Deputy Brian Hayes

I thank the Deputy for bringing the latter issue to my attention. The information will be passed on immediately to the Revenue Commissioners to obtain a view on it.

The payment of back tax is an issue for the Revenue Commissioners. Last year the Minister brought legislation through the Oireachtas to ensure the Revenue Commissioners would be an independent, statutory organisation and not under the thumb or control of anybody. The Deputy is aware of this and not making that charge against the Minister for Finance. The Revenue Commissioners have already said stated the back tax issue will be examined on a case by case basis. The P35 form for 2011 was due to be filled in by a pension provider or employer on or before 15 February this year.

I am further advised that the first automatic review process will start before the end of March.

It is my understanding the Revenue Commissioners have taken the 115,000 cases on a phased basis. In a few months time we will be in a better position to give an accurate view of the total liability involved.