Vol. 494 No. 4
266 Ms Shortall asked the Minister for Finance if his attention has been drawn to the 1997 Annual Report of the Comptroller and Auditor General which shows a figure of £1.69 billion in outstanding taxes and levies; his views on the underlying reasons for non-compliance with tax laws on such a large scale; the steps, if any, he will take to collect this outstanding amount; and if he will make a statement on the matter. [18547/98]
The recently-published Annual Report of the Comptroller and Auditor General in respect of 1997 shows a figure of £1,329 million in outstanding taxes and levies. The figure in the corresponding report last year was £1,690 million. This represents a substantial reduction of £361 million on last year and continues the trend of recent years which has seen a dramatic reduction in the overall arrears. The total balance outstanding now represents less than 10 per cent of the annual tax yield, as compared with arrears equivalent to 57 per cent of the current tax yield in 1988.
The collection of tax is the responsibility of the Revenue Commissioners. The Commissioners advise me that this reduction in the overall level of tax debt is the result of a combination of initiatives taken by them. These include resource-intensive programmes for the collection of debt wherever possible, as well as programmes for discharge or write-off of old uncollectable amounts and, most importantly, vigorous activity to continuously improve compliance in the payment of current taxes.
As was explained in the Comptroller and Auditor General's Report, the large increase in the amounts of tax written-off — £281 million in 1997 — is due to a revision of the Commissioners' write-off policy with a view to deleting from their records the large amounts of debt which are old and regarded as uncollectable and, in the case of estimated assessments from the pre-self assessment era, are likely to overstate actual liabilities. A substantial amount of debt also relates to companies that have ceased trading. The objective of the programme is that the debt showing on the books will be more realistic and in large measure collectable, and will enable resources to be better targeted and more effectively deployed in collecting arrears.
The underlying reasons for non-compliance with tax laws are many and varied. In many cases non-compliance with tax payment obligations arises from serious financial difficulties in the business. These difficulties vary from temporary cashflow problems to total insolvency. There are also those who seek to delay making payment or to avoid paying altogether, notwithstanding the significant advances made by Revenue in simplifying procedures in recent years so as to encourage voluntary compliance. The Revenue Commissioners have now dedicated debt management teams in place in the Collector-General's office, in local inspectors' offices as well as new teams of local collectors. These teams, aided by the most up-to-date technology and using the relevant statutory powers, apply a case management approach to non-compliance. The approach is proving particularly successful as is shown by the improvements in return-filing and payment compliance, the reduction in the debt and the healthy Exchequer returns. These improvements are acknowledged by the Comptroller and Auditor General in his annual report.
