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Tax Collection.

Dáil Éireann Debate, Thursday - 3 March 2005

Thursday, 3 March 2005

Ceisteanna (61, 62)

Kathleen Lynch

Ceist:

60 Ms Lynch asked the Minister for Finance the number of breaches detected of the Waiver of Certain Tax, Interest and Penalties Act 1993 in respect of each year since 1994; the number of prosecutions initiated and convictions secured arising from such detections; if he has satisfied himself the law is being applied in the manner intended by the Oireachtas; if his attention has been drawn to comments made by the chairman of the Revenue Commissioners at the meeting of the Committee of Public Accounts on 2 December 2004 in which he referred to the difficulties faced in initiating prosecution for breaches of the Act; and if he will make a statement on the matter. [7158/05]

Amharc ar fhreagra

Freagraí scríofa

I am advised by the Revenue Commissioners that there are two ways in which a taxpayer may have been in breach of the amnesty, either through making a false declaration or through not making a declaration. The Revenue Commissioners do not have figures for the number of detected breaches of the amnesty. The confidentiality conditions built into the 1993 amnesty legislation make such breaches difficult to identify and prove.

Individuals and companies have been successfully prosecuted in recent years as a result of Revenue investigations and, although these investigations have in some instances involved consideration of possible amnesty breaches, it has not generally been possible to obtain the evidence necessary to meet the required standards of "beyond reasonable doubt" from an amnesty perspective. However, one individual has been successfully prosecuted to date for failure to comply with the obligatory provisions of the Waiver of Certain Tax, Interest and Penalties Act 1993 following a Revenue investigation and is awaiting sentence. There was a well-publicised conviction in the Circuit Criminal Court recently for tax offences related to the amnesty and in January last a six-month jail sentence was handed down.

Revenue's criminal investigation programmes have been refocused recently with the establishment of an investigations and prosecutions division, one of the functions of which is to increase the number of prosecutions for serious tax evasion. Many of the cases under investigation relate to tax offences committed in recent years and do not therefore involve consideration of amnesty issues. However, a number of cases have been identified which could involve offences in regard to the amnesty and they will be investigated with a view to taking a criminal prosecution.

I am aware of the comments made by the chairman of the Revenue Commissioners at the Committee of Public Accounts in December 2004, in response to questions regarding the 2003 Report of the Comptroller and Auditor General on the issue of the tax amnesty. He referred to the serious difficulties the Revenue Commissioners had in obtaining admissible evidence due to the confidentiality safeguards enshrined in the amnesty legislation. He went on to say there were two cases coming before the courts in the near future and that much would depend on the outcome of these as to whether the other cases being investigated would go for prosecution. One of these is the successful Revenue conviction mentioned earlier.

In view of this, I am satisfied the Revenue Commissioners are making every effort to ensure the law is applied in the manner intended by the legislation as passed by the Houses of the Oireachtas. Deputies are aware the Finance Bill 2005 contains important additions to the powers of the Revenue Commissioners to seek prosecutions, which will be of assistance in deterring and allowing the prosecution of future tax offences.

Liz McManus

Ceist:

61 Ms McManus asked the Minister for Finance the progress made by his Department and the Revenue Commissioners in their consideration of the recommendations of the Revenue Powers Group; and if he will make a statement on the matter. [7186/05]

Amharc ar fhreagra

The Revenue Powers Group was established in March 2003 to review Revenue's main powers and recommend changes. The group reported in late 2003 and its report was published in February 2004. At the time of publication of the report, the then Minister for Finance indicated his intention to allow a period for public debate and reflection on many of the wide-ranging issues raised by the recommendations.

I have now considered the various recommendations and, in this year's Finance Bill, initiated the first measures in a process of reforms in the area of Revenue powers. The measures contained in the Bill represent a balanced package which includes some of the recommendations of the Revenue Powers Group. I intend to return to some of the remaining recommendations, which require further consultation and careful consideration, for future implementation. In this context, the recent report of the Law Reform Commission on a fiscal prosecutor and a revenue court is also relevant.

One of the measures proposed in the Finance Bill 2005 as a result of the Revenue Powers Group report is the increase in the publication limit for settlements with tax defaulters from €12,700 to €30,000. The limit of €12,700 has not been changed since it was first enacted in 1983 and if indexed according to the CPI would be of the order of €26,000. The RPG recommended a limit of €50,000 while the Law Reform Commission recommended a limit of €25,000. The amendment provides that the limit be automatically revised every five years in line with the CPI to a rounded figure of the next €1,000.

The interest rate on underpaid tax will be reduced to a daily simple interest rate equivalent to 10% per annum for non-fiduciary taxes while retaining the 11.75% rate for fiduciary taxes, which are collected and remitted on behalf of others, for example, VAT and PAYE. The Bill also provides for the repeal of the 2% per month interest charge for ‘fraud and neglect' and the 200% tax-geared penalty for fraud from a current date. However, both will remain on the Statute Book for historical "legacy" cases.

Other recommendations of the group will also be administratively implemented or have already been implemented by the Revenue Commissioners. The Revenue Powers Group had concerns regarding the modalities of exchange of information between Revenue and other agencies, especially the Office of the Director of Corporate Enforcement. Revenue and the ODCE have recently concluded negotiations and signed a memorandum of understanding which will govern this information exchange and largely meets the group's concerns.

The targeting of audits will be continually improved through greater focus on risk. Regional "powers officers" have been appointed within Revenue to manage the use of powers in the new regions. Compliance costs will be reduced wherever possible and the cost of compliance will continue to be weighed up when considering the introduction of new powers. Revenue will aim to examine records at the taxpayer's premises where the removal of records would prevent the business carrying on in an orderly manner. In addition, Revenue will give more prominence to the external reviewers and in future will have them appointed using the Civil Service and Local Appointments Commission.

I have also addressed a number of other issues within the general area of Revenue powers which did not arise from the recommendations of the Revenue Powers Group.

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