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Tax Exemptions

Dáil Éireann Debate, Thursday - 30 January 2014

Thursday, 30 January 2014

Questions (41, 42, 43)

Jim Daly

Question:

41. Deputy Jim Daly asked the Minister for Finance the number of organisations currently availing of charitable status; if he is satisfied with the present system in place as operated by the Revenue Commissioners; his plans to review same; and if he will make a statement on the matter. [4709/14]

View answer

Jim Daly

Question:

42. Deputy Jim Daly asked the Minister for Finance if he is in a position to confirm the amount of revenue foregone to the Exchequer under exemptions granted to organisations that have been granted charitable status for each of the past five years; and if he will make a statement on the matter. [4710/14]

View answer

Jim Daly

Question:

43. Deputy Jim Daly asked the Minister for Finance the avenues available to query the Revenue Commissioners regarding their allocation of charitable exemption to individual organisations; and if he will make a statement on the matter. [4711/14]

View answer

Written answers

I propose to take Questions Nos. 41, 42 and 43 together.

The administration of the Charitable Tax Exemption is a matter for the Revenue Commissioners. I am informed by Revenue that 8,421 bodies currently hold charitable tax exemptions and that a full list of such bodies is available on the Revenue website at www.revenue.ie.

I am also informed that the relevant information available as to Exchequer cost is in respect of the exemption from Income Tax of charities, colleges, hospitals, schools, friendly societies, etc in the years 2007 to 2011 inclusive, the latest year for which the necessary information is available. The relevant information is as follows:

Tax Year

Cost  €m

2007

30.7

2008

35.8

2009

40.7

2010

35.5

2011

31.1

The income on which these costs are based includes dividend income on which Income Tax deducted at source has been repaid, other investment income, payments received under covenant, donations by the PAYE sector to approved bodies, together with the associated tax relief and donations by the self-employed and corporate sectors to approved bodies and approved sports bodies.  Information is not available about other income received gross of tax. In the absence of other information, tax has been assumed at the standard rate of income tax even though a different rate might be more appropriate.

Revenue has no regulatory role in relation to charities and its function is rightly confined to responding to applications from bodies claiming exemption from tax on the basis that they are charities and ensuring that once they have been granted an exemption they continue to comply with the terms of that exemption. With regard to the allocation of charitable tax exemptions to individual organisations, Revenue is independent in the performance of its day-to-day functions and is also obliged to maintain confidentiality in respect of taxpayer affairs. Therefore it is not in a position to provide information to any third party regarding the granting of charitable tax exemptions to individual organisations.

Revenue has pointed out, however, that the procedures in relation to the granting of charitable tax exemptions are set out in detail on the Revenue Website and implementation of these procedures is subject to controls including oversight by officers at various levels within Revenue to ensure that conditions are adhered to.

Before making a decision to refuse a charitable tax exemption or to withdraw an existing exemption, Revenue is obliged to apply fair procedures and to afford the parties concerned an opportunity to state their arguments fully. Once a decision is made it can be appealed to the independent Appeal Commissioners. I have been assured by Revenue that the procedures currently in place for granting Charitable Tax exemptions and reviewing the continued entitlement of bodies to those exemptions are appropriate.

I am satisfied with these assurances and with the arrangements that are in place for Revenue to fulfil its role in relation to the tax exemption. I am strongly of the view that Revenue's role is in ensuring the proper operation of the tax system and in the context of charities this means the proper operation of the exemption. Revenue is not and, in my opinion should not be seen as, the quasi-regulator of the charity sector. The Deputy is no doubt aware that the charitable sector is subject to a separate regulatory framework.

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