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Dáil Éireann díospóireacht -
Wednesday, 22 May 1991

Vol. 408 No. 8

Ceisteanna—Questions. Oral Answers. - Self Assessment Taxation System.

Eric J. Byrne

Ceist:

10 Mr. Byrne asked the Minister for Finance the number of tax inspectors engaged in self-assessed returns from the self-employed or companies and the numbers actually engaged in the auditing of returns; his views on whether these are adequate; and if he will make a statement on the matter.

Before answering the Deputy's question, I want to give the House necessary background information. The changeover from the old system to self-assessment is a major management challenge. To ensure that this changeover takes place in an orderly manner, the two systems must run in tandem for a number of years. As the volume of work under the old system diminishes, staff can be released to operate the new system.

I must stress that it is not a necessary condition of the success of the self-assessment system that a full audit system be in place from day 1. Inspectors of taxes have a six-year period during which cases remain open and cases chosen for audit in any year are liable to be audited for the preceding five years. Against this background, I am satisfied that the transition to the new self-assessment system is progressing satisfactorily, including the implementation of the audit programme.

So far, it has been possible to release 532 Revenue staff to the administration of the self-assessment system. Of these, 45 are inspectors who are engaged directly in self-assessment audit work. It is expected that this number will be increased to 100 inspectors of taxes over the course of 1991, with further deployment of personnel into the audit area during 1992 and subsequent years.

Up to now the audit function has been confined to income tax returns only. A corporation tax audit unit was established at the end of 1990 and audits will commence shortly.

The audit of income tax returns, to which the Deputy is referring, is, of course, only one dimension of the total Revenue audit capacity. There are also separate audit programmes covering employer's PAYE, value-added tax and construction industry tax. The total audit programme last year involved 241 officers and entailed some 26,000 visits and resulted in an impact on 9 per cent of the taxpayer base of 270,000 (including companies). This is very high by international standards.

In addition, a further 28,000 compliance visits (covering such items as tax payments and non-filing of various returns) were made by officers of the Revenue Commissioners, bringing the total between audit and compliance visits to approximately 19 per cent of the taxpayer base.

The level of self-assessment audits should be such as to ensure compliance by and confidence of taxpayers in the system. Bearing in mind the level of audit coverage already available and the additional resources being freed for audit work over the coming years, the Revenue Commissioners are satisfied that they have adequate resources to put in place an effective audit programme as part of the self-assessment system.

How many audits were actually carried out last year? Is the Minister concerned that the audits that were carried out produced an average take for the Exchequer of about £10,000? Would the Minister agree with the estimate of the union representing Revenue staffs that the total amount outstanding in tax from the self-employed area under self-assessment is in the order of £400 million?

There are two or three parts to the question that are totally different from the question put down here and I will not comment on them without the adequate information in front of me. The question was in regard to the number of tax inspectors engaged in self-assessment returns from the self-employed and the numbers actually engaged in the auditing of returns. I have already said that this is a two-stage operation, that the systems are run in tandem and that there is a six-year period to go back on them anyway. Naturally, as people are released from the old system there are more available to go into the new system. I also provided in the budget this year £1 million additional resources for this area and the Revenue Commissioners are satisfied that they have adequate resources to do the job they are doing.

My first question arose directly from the Minister's reply in which he stated that the work of the persons involved in auditing impacted on 9 per cent of cases. I would like the Minister to clarify whether that means that 9 per cent of the cases were audited or whether in fact the numbers audited are actually less than 1 per cent, as claimed by the union representing the staffs. I would like the Minister to clarify that. I do not think that is a separate question.

If the Deputy wanted that information he should have put it down as a question. If he wants to put it down as a written question I will give him the written answer. The Deputy cannot go into areas——

The Minister should not quote the figure of 9 per cent when it is clearly not 9 per cent.

The Deputy's problem is that he is trying to get more members into that section.

Would the Minister answer the question? The Minister is clearly not answering the question.

The Deputy does not like to hear the truth.

The Minister is in possession.

Well, I am waiting.

Deputy Gilmore knows that the Revenue Commissioners are trying to get more and more people into an area where they state they have adequate resources. Where there were shortfalls, I provided £1 million in the budget this year to help them along their way. They are satisfied with the resources they have. They do not want to take on any more staff that they would not need in a year or two. People are being released all the time from the old system to take on the new system. Deputy Gilmore is trying to create a situation where the new system would be staffed up and there would be all that additional staff in a year or two, and then, of course, it would give more members to his own association. We all know where he is coming from now.

For the final time, a Cheann Comhairle, I would like to ask the Minister if he can confirm that the number of audits carried out by the limited number of staff available last year was of the order of 1,000, which is less than 1 per cent of the total number concerned and that the chances of a self-employed person being fully audited at present is about once every ten years.

This is repetitive.

What they have been doing is very high by international standards. If Deputy Gilmore wants the information all he has to do is put down a separate question and he will get the details. The results they are getting are higher than international standards. I know the Deputy does not like it, but that is the reality.

It is not higher than international standards.

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