Pat Upton
Ceist:19 Dr. Upton asked the Minister for Finance the total number of applications received by the Revenue Commissioners for the tax amnesty at the end of the original deadline; and the total amount of money contained in the applications.
Ceisteanna—Questions. Oral Answers. - Tax Amnesty.
Liz McManus
Ceist:43 Ms McManus asked the Minister for Finance the total amounts received under each of the two tax amnesties; if, in respect of the general amnesty, he will give the total amount written off in regard to interest and penalties; if, in respect of the 15 per cent amnesty, he will give the total tax liabilities written off.
Bernard J. Durkan
Ceist:55 Mr. Durkan asked the Minister for Finance the expected total receipts from the 1993 tax amnesty as at the end of January 1994; whether such receipts are in line with or short of expectations; and if he will make a statement on the matter.
I propose to take questions Nos. 19, 43 and 55 together.
Under the special statutory confidentiality arrangements which apply in relation to the 15 per cent amnesty the Chief Special Collector may only supply certain information to me and this only in the form of aggregates of the total amount of the declared amounts, the total amount of the settlement amounts, the total amount of value-added tax remitted to the Chief Special Collector and the total numbers of individuals who remitted amounts to the Chief Special Collector. This information will relate to the position as at the deferred declaration — filing date of 21 December 1993.
The large volume of payments received under both amnesties is still being processed and will take some time to record and analyse. I will be happy to provide the information allowed by the legislation as soon as it is available to me.
I can, however, inform the House that the total amount of tax paid under the two amnesties is currently estimated at £240 million, of which £9 million was paid in 1993. The amount remitted under the 15 per cent incentive amnesty is estimated to be of the order of £190 million in respect of declared amounts of income and gains. Declared amounts are income or chargeable gains for the period up to 5 April 1991, in respect of which any tax due had not been paid. The actual tax due in respect of these amounts would depend on each individual's particular circumstances and the rates of tax in force at the time. An exercise to establish the amount of the pre-amnesty tax liability in each case would not be possible because of the confidentiality arrangements which are the cornerstone of the incentive amnesty.
The balance of the amnesty payments — some £50 million — related to the general amnesty. I am informed by the Revenue Commissioners that it is not feasible to provide information on the amount of interest and penalties which will be waived under the provisions of this amnesty. These figures represent the best estimates at this juncture.
No target figures had been set for the amnesty. It will be clear from the significant figures which I have given for the estimated receipts that the outcome of the amnesty scheme has been very satisfactory.
In relation to the 15 per cent incentive amnesty, could the Minister tell the House the amount of taxation paid under this particular heading that was known to the Revenue Commissioners to be owing at the appropriate rate?
Until all of the certificates have been completed and analysed I will not have the full information in that regard. Quite frankly, I believe it will take several weeks yet before this work is completed because I received a joint request from the accountancy bodies for additional time to send in their returns and there has been a time extension in respect of some of the 1991-92 returns. The Revenue Commissioners received most of the declarations and the payments on the last day of the scheme so there will be a delay in collating the information the Deputy seeks.
In the lengthy debates we had here concerning the tax amnesty, one of the arguments put forward by the Minister was that it would widen the tax base and bring in income that was not know about previously. What is the Revenue Commissioners estimate now of what the widening of the tax base will yield? Also, will the Minister arrange to let the House have a breakdown of the payments that were made in regard to disclosed and undisclosed taxes because that is the relevant point? That information would give us an indication of where the tax base has widened and also of what tax has been discounted? In other words, people who are paying 40 per cent capital gains tax or 50 per cent income tax could now rewrite their tax bill for unpaid arrears at 15 per cent. We need to be able to calculate how much has been lost to the Exchequer as a result of this amnesty.
There is little point in Deputy Yates talking about what we have lost. Most people were surprised by the extent of the yields from the incentive amnesty scheme. In regard to the point about the 1992 returns, the accountants are now working on bringing the figures up to date and that should prove a very useful excercise in terms of extending the tax base. Deputy Yates will also be interested to know that the number of payers under the incentive amnesty scheme is estimated at this stage — this is not a final count — to be approximately 35,000 people.
The Minister told us that the total amount paid under the 15 per cent special amnesty was £190 million. If my mathematics are correct that means that the crock of gold of income on which tax was not paid amounts to £1.3 billion which could represent, assuming that these people would be due to pay tax at higher rates, an annual loss to the Exchequer of somewhere in the region of £600 million. Could I ask the Minister how many tax payers or, more accurately, non tax payers, did that £190 million come from? The Minister gave a figure of 35,000.
That was just for the incentive amnesty.
The figure of 35,000 was for the 15 per cent amnesty? Then, if my assumption is correct the total amount of money on which tax was not paid, based on that 15 per cent, is in order of £1.3 billion.
There is little point at this stage in the House getting into hypothetical figures.
It is not a hypothetical figure; it is a simple sum.
As Deputies know most of that money would not have been collected in the ordinary course of events. The fact is that the people who used the incentive amnesty scheme did not avail of the amnesty scheme in 1988. They were outside the system, had not been detected but by and large have now brought their affairs up to date. They have adhered to the conditions of the incentive amnesty scheme and can be expected from now on to keep their accounts up to date as happened in the case of the previous amnesty scheme four or five years ago. It is worth noting that one of the successful aspects of the tax system here over the past five years is that when people came into the system, they stayed in. That is why the tax base has widened, is why the figures for corporation tax and other tax have increased and why we have a far better system now. While we might have wished that more overseas money had come back into the system, quite an amount of it did, particularly during the extension period. Probably the best thing we did was to agree on that extension.
Can the Minister say how many of the 35,000 people who availed of the provisions of this scheme had already agreed their tax liability with the Revenue Commissioners but, through a loophole, took advantage of the provisions of this scheme and were actually subjected to the 15 per cent by default?
I think I was asked that question for written reply today or last week.
Last week.
I cannot quite recall, but it would be a very small number of people. In some cases people who had paid their full amounts and were not aware of the contents of the tax amnesty came forward again. In such cases they are to be reimbursed on identifying themselves.
I think Deputy Gay Mitchell anticipated my question. I believe the answer given last week was £100,000 by way of repayments and £95,000 by way of tax offsets in the future.
Since the Minister thinks so much of the amnesty, will he say when the next amnesty will take place?
My views are fairly well known on that.
There should be an amnesty for amnesties.
Perhaps a number of us should examine our consciences. I asked somebody to run through the records for last year and give me an indication of the relevant figures. There was much talk of those outside the system who would avail of the provisions of the amnesty. I am afraid none of us got it right.
If there is another amnesty, will the Minister say whether he will spend the moneys in Dublin South-Central?
I have already done that.