Denis Naughten
Ceist:54 Mr. Naughten asked the Minister for Finance his views on whether taxpayers should receive interest on overpayments of tax along with the refund of tax. [25608/02]
Written Answers. - Tax Rebates.
Thomas P. Broughan
Ceist:80 Mr. Broughan asked the Minister for Finance the progress made to date in his Department's examination of the Ombudsman's recent report in regard to interest payments in respect of tax repaid; and if he will make a statement on the matter [25548/02]
I propose to take Questions Nos. 54 and 80 together.
The issue of interest on overpayments of tax was the subject of a recent report by the Ombudsman. I gave my initial response to this report in a statement I issued on 6 November. I also wrote to the Ombudsman on 6 November indicating that I would study his report carefully. As the Deputies are aware, the Revenue Commissioners have indicated that they were unable to implement certain recommendations of the Ombudsman's report on the basis that they do not have the statutory authority in these cases to pay interest in respect of tax repaid.
My Department, in conjunction with the Office of the Revenue Commissioners, is examining the contents of the report. Indeed, the general issues raised by the Ombudsman are already being actively examined.
As I indicated in my initial response to the Ombudsman's special report, any solution has to be on a general basis taking into account all the issues, including the amount of revenue involved. In this regard, the House might be interested to note that the Revenue Commissioners pay out billions of euro in tax rebates each year. Consequently, the Exchequer implications of a general interest scheme must also be weighed. It is appreciated that what the Ombudsman is arguing is that Revenue should provide for a scheme confined to cases where Revenue are found to be at fault or guilty of maladministration. However, given the wide range of circumstances in which this can arise, including those in which a settled interpretation of law is overturned, even a confined scheme could result in very significant costs to the Exchequer. The parameters of any statutory scheme, which may be considered to address the repayments issues, will need to be thoroughly and carefully examined. As with all legislative changes, such a scheme, if introduced, would apply prospectively. I will consider the result of this examination in the context of the Finance Bill.