Dáil Éireann Debate, Tuesday - 13 March 2012
136 Deputy Robert Troy asked the Minister for Finance if he will provide details of the circumstances in which he anticipates the Revenue Commissioners will use the new powers to be conferred on them under Section 111 of the Finance Bill 2012; his views on the impact of such a measure on small businesses; and if he will make a statement on the matter. [13529/12]
Amharc ar fhreagraI am informed by the Revenue Commissioners that this provision is being introduced to address those businesses that deliberately build up significant arrears of tax with no intention whatsoever of ever clearing their tax debts. The types of persons in question are what are commonly known as phoenix companies and similar type operators. They typically run up large Revenue tax liabilities with no intention of ever paying them and when the Revenue Commissioners initiate enforcement proceedings against them they close the business and start up again in a different form.
In many cases the taxes in question involve fiduciary taxes, such as PAYE and USC that they withhold from employees and VAT withheld from consumers and other businesses. Instead of paying these fiduciary taxes over to Revenue for the benefit of the Exchequer as they are obliged to do, they use them for their own benefit — in the process giving themselves a competitive advantage over legitimate businesses.
This provision will not have any impact on legitimate businesses, large or small that take reasonable care in relation to their tax compliance. In most cases, there are legitimate reasons why businesses may fall into tax arrears. Revenue does and will continue to enter into arrangements with those businesses that come to them with genuine problems and proposals to pay arrears of tax with a view to achieving long term tax compliance. This provision is not aimed at those businesses.
The Revenue Commissioners have undertaken only to use this provision after publishing guidelines on how it will be applied.
