Vol. 567 No. 1
201 Mr. Allen asked the Minister for Finance if he will introduce legislation or regulations to allow compensation be paid, further to a report (details supplied) in view of the fact that the Revenue Commissioners state that they have no statutory authority to make such compensatory payments. [13605/03]
The Ombusdman's special report to the Oireachtas of November 2002 entitled Redress to Taxpayers made a number of recommendations. The Revenue Commissioners accepted and moved immediately to implement two of the five recommendations. These were the repayment of an additional five years tax in the two cases which were the subject of the report and repayments in any other cases similarly affected. However, Rev enue maintained that it could not implement the other recommendations of the Ombudsman in regard to paying compensation for loss of purchasing power because it did not have the statutory authority to do so.
On foot of the Ombudsman's special report, I introduced legislative provisions in Finance Act 2003 which provide for a general right to repayment of taxes and duties, subject to a four year claim period. The scheme also provides a right to interest on such repayments subject to certain conditions. These general provisions are prospective and represent a balanced approach to providing general rights to repayment and interest while protecting the Exchequer from unquantifiable and unlimited costs.
In order to respond fully to the Ombudsman's report, provisions were also made in the Finance Act to cater for certain specific cases on which the Ombudsman had made recommendations. The cases in question arose from a court finding (O'Coindealbháin v. O'Carroll) which led to a reinterpretation of tax law regarding the tax treatment of Garda widows' pensions. The provisions provided for in Finance Act 2003 enabled the Revenue Commissioners to make payments for loss of purchasing power to the widows referred to in the Ombudsman's report. Payments will be made by reference to the consumer price index, as recommended by the Ombudsman, and will come out of the central fund.
In addition, the Revenue Commissioners will use the voted funds mechanism to make loss of purchasing power payments to a much smaller remaining group of ten taxpayers arising from other tax matters on a wholly exceptional and ex gratia basis, so as to complete the response to the Ombusdman's recommendation.
I am informed that appropriate administrative arrangements are now in place and payments have begun to issue to the people concerned.
