Written Answers Nos. 50-60
50. Deputy Peadar Tóibín asked the Minister for Finance if an estimate has been made of the tax that could be raised for the State if Revenue audit activity was increased by 20% in 2013 specifically to target black market activity; and if there is a cost associated with increasing audit acitivity, for example, additional recruited staff for Revenue. [42265/12]
Amharc ar fhreagraShadow/hidden economy activity creates distortions in the economy and competitive disadvantages for compliant businesses. For these reasons, Revenue focuses on deterring shadow/hidden economy activity and non-compliance through its audit and investigation programmes based on risk analysis, use of Revenue powers and their intelligence and information systems. I am advised by the Revenue Commissioners that its compliance programmes are under constant review to ensure that they are focussed on the areas of greatest risk, including risks from the shadow economy, and that this approach contributes to optimising the effectiveness of their audit resources. The results of its audit and compliance programmes are published each year in the Revenue Annual Report and in 2011, Revenue carried out over 11,000 audits that resulted in additional yield of €440.5m to the Exchequer, with a further €81.3m collected from other compliance interventions and assurance checks,
The type of initiatives aimed specifically at shadow economy activity include:-
- Joint Investigation and information sharing activities with the Department of Social Protection aimed at uncovering either non-declaration or under declaration of income and/or fraudulent DSP claims;- Strengthening tax legislation to provide for a robust framework within which the Revenue Commissioners may tackle tax and duty evasion, including recent provisions relating to the making of returns of transactions by merchant acquirers and the more effective investigation of white-collar crime;
- A comprehensive package of measures in relation to Excise (Oils) including, a requirement for separate licences for auto-fuel traders and marked fuel traders, a requirement to have a separate licence for every premises or place at which the fuel concerned is dealt in, and a requirement that a licence must be clearly displayed at the premises or place;
- Revenue’s tobacco strategy, “Strategy On Combating the Illicit Tobacco Trade (2011- 2013)” was published on the Revenue website in June 2011. This three-year strategy is underpinned by annual action plans;
- Regulations introduced in 2011 requiring Government Departments and State Bodies to supply details of payments made to the Revenue Commissioners;
- Revenue has a prioritised focus on those sectors that traditionally have been susceptible to shadow activity such as cash businesses. All possible sources of information, including following up on services advertised on TV, radio, local newspapers, internet, special interest publications are used by Revenue;
- Holding meetings with trade and representative bodies through The Hidden Economy Monitoring Group where mutual interest issues are discussed;
- Focussing Revenue investigations on the use of computer programmes or electronic devices to alter or conceal sales records;
- Streetscape programmes, in which every cash business in an area is visited, without prior announcement, have been carried out to detect unregistered businesses and non-recording of cash sales.
The Deputy will appreciate that the scale and range of activities carried out by the Revenue Commissioners to tackle the shadow economy are extensive. In addition, the nature of these activities is highly resource intensive however, as is the case with all public service organisations, the Revenue Commissioners must play its part in meeting Government policy on public service staffing numbers. I am satisfied that Revenue is optimising the outputs from its existing audit and compliance resource, and as the Deputy will see from the list of activities above, audit, which is costly for business and for Revenue, can only be a part of a broader strategy.
As part of its published Comprehensive Review of Expenditure for 2011, the Revenue Commissioners indicated that by increasing audit, investigation and compliance resources by approximately 125 qualified staff, which they estimate would cost €6.5m per annum, an estimated additional yield of €100m per annum could be achieved. I can confirm to the Deputy that all proposals of this nature are kept under ongoing review by my colleague the Minister for Public Expenditure and Reform and the Government in the context of other tasks assigned to the Revenue Commissioners and competing demands for resources across the public service.
51. Deputy Pearse Doherty asked the Minister for Finance if he will provide an update on the on-going negotiations with the Troika on the promissory note technical paper and in view of the fact that the paper was to be finalised by February 2012, the reason for the delay and an estimated date for its publication. [42257/12]
Amharc ar fhreagraAs the Deputy is aware, the Irish Government has been working extremely hard to secure a deal on the Irish bank debt and detailed work will continue to ensure that the positive moves in Europe are harnessed to maximise the benefit to the Irish taxpayer. This remains one of the Government’s key priorities. We will continue to target the reduction of the burden to the State of funding the bank recapitalisation and due consideration is being given to various mechanisms to achieve this goal. As previously advised to the Deputy in July, the idea of the common paper was initially mooted in January/February of this year and there have been no firm deadlines as to the delivery of the paper. Nonetheless, on-going discussions with the Troika are considering all options for the restructuring of the notes in terms of the source of funding, the duration of the notes, the interest rate applicable etc.
It is not possible to give guidance on the timing of these negotiations as to do so could impede our ability to achieve the best possible results for the Irish taxpayer, but every effort is being made to expedite the on-going process.
52. Deputy Patrick O'Donovan asked the Minister for Finance his plans to bring forward legislation or regulations to control debt management agencies and advisors; and if he will make a statement on the matter. [41255/12]
Amharc ar fhreagraThe Government is committed to having in place an effective regulatory/supervisory system for those firms which provide a debt management and/or a debt advice service. I have received Government approval to bring forward an amendment, at the Committee Stage, of the Central Bank (Supervision and Enforcement) Bill 2011 to provide for a regulatory regime for debt management and debt advice companies.
53. Deputy Richard Boyd Barrett asked the Minister for Finance if he will consider higher taxes on incomes of more than €100,000; and if he will make a statement on the matter. [42323/12]
Amharc ar fhreagra60. Deputy John Halligan asked the Minister for Finance if he will consider higher taxes on incomes of more than €100,000; and if he will make a statement on the matter. [42284/12]
Amharc ar fhreagraI propose to take Questions Nos. 53 and 60 together.
The position is as stated in the Programme for Government that as part of the Government’s fiscal strategy we will maintain the current rates of income tax together with bands and credits. In addition, we will not increase the top marginal rates of taxes on income. There are no plans at this time to depart from this policy.
54. Deputy Mary Lou McDonald asked the Minister for Finance if he will provide a report on all new tax reliefs provided for in budget 2012 including the number of persons or companies who have availed of each tax relief; the total amount of relief awarded under each relief; and the number of jobs that have been directly created as a result of each relief. [42262/12]
Amharc ar fhreagraIn relation to costs, the estimated full year costs and/or yields of the tax revenue measures introduced in Budget 2012 are set out on pages B5 – B 11 of the Summary of 2012 Budget and Estimates Measures Policy Changes section of the Budget 2012 book. To enable meaningful evaluation to take place, the reliefs need to have been in place for some period of time. As 2012 is the earliest year in which the changes can take effect, information on the take-up of these tax reliefs will not be available until appropriate tax returns for 2012 are provided to the Revenue Commissioners.
The analysis of tax reliefs or expenditures was considered by the Commission on Taxation. The Commission was of the opinion that tax expenditures should be the subject of ongoing evaluation and appropriate and timely cost benefit analysis. This is to ensure that they are both economically efficient and that parliamentary oversight can be well informed. I would generally agree with the view of the Commission but regard has to be had to the principle of proportionality in relation to any analysis. In other words, the level of resources invested in carrying out the analysis should be commensurate with the scale of the expenditure involved and of course sufficient time is needed to undertake the analysis required.
Finally, I would advise the Deputy that all tax reliefs are kept under review and form part of the Tax Strategy Group’s (TSG) discussions in advance of the Budget. The TSG papers are subsequently published on the Department of Finance’s tax policy website: www.taxpolicy.gov.ie.
55. Deputy Brian Stanley asked the Minister for Finance if his attention has been drawn to the Autumn 2012 Quarterly Economic Observer report from the Nevin Economic Research Institute; if he has considered their alternative budgetary approach to that currently being implemented by him; and if so, if he will outline in broad terms his response to the proposals. [42270/12]
Amharc ar fhreagraI am aware of the report referred to by the Deputy. The Government is eager to hear reasonable proposals for budget measures from all interested parties and organisations. We will consider them fully and give them due consideration. Last year’s Medium-Term Fiscal Statement set out a multi-annual fiscal consolidation strategy agreed by Government for the period to 2015. It showed the levels of consolidation it is estimated are necessary to deliver annual General Government deficit targets. It also showed the proposed split between expenditure and revenue measures and within expenditure, between current and capital measures.
The Government is committed to meeting annual General Government deficit targets and to reducing the deficit below 3% of GDP by 2015. In that context it is clear that there remains a large deficit in our public finances that must be closed further in the coming years and this will require adjustments to both expenditure and revenue.
The objective of Government is to ensure that consolidation is implemented in a credible manner, while seeking to minimise the impact on the economy and the labour market. In line with the economic literature and the broad consensus amongst various economic agencies the Government believes the most effective and growth friendly way to implement such consolidation measures is by concentrating the majority of the adjustments on the expenditure side. Consequently, around two-thirds of the forthcoming adjustments are expected to be realised from expenditure. However, revenue raising measures have and will continue to be an important part of the overall adjustment process.
56. Deputy Pádraig Mac Lochlainn asked the Minister for Finance if he will list what is considered deductible for tax purposes for those self-declaring annual returns. [42263/12]
Amharc ar fhreagraI assume that the Deputy is referring to what may be appropriate to deduct in the context of the computation of profits from all sources by those who are required to submit an annual tax return to the Revenue Commissioners under the Pay and File system. I am advised by the Revenue Commissioners that there is no standard list of what is deductible for tax purposes for either companies or individuals that submit annual tax returns. The nature and extent of deductions will vary depending on the type of income or business involved. For example, deductions in relation to rental income are limited to the items listed in section 97 of the Taxes Consolidation Act 1997. These are expenses related to rent, rates, maintenance, repairs, property management expenses, insurance and interest.
In general, profits in relation to a business are based on the profits as computed in accordance with normal accounting rules. This is subject to specific rules in the tax code such as those which provide that certain deductions may not be claimed for tax purposes. For example, section 81 of the Taxes Consolidation Act 1997 ensures that only expenses which are incurred wholly and exclusively for business purposes are deductible. Moreover, entertainment expenses, even if incurred for business purposes, are not deductible.
58. Deputy Michael Colreavy asked the Minister for Finance if he will publish the direct cost to the Exchequer of all existing tax reliefs, including a distributional analysis of which households by income decile group are expected to benefit from each existing tax relief; which firms are expected to benefit; and if he will make a statement on the matter. [42276/12]
Amharc ar fhreagraAs regards tax reliefs currently available, a comprehensive summary of these was provided recently in my reply to PQ 38291/12 and a copy of this reply has been provided to the Deputy. That reply contains details, as advised to me by the Revenue Commissioners, of the total identifiable costs to the Exchequer relating to income tax and corporation tax allowances, reliefs, exemptions and tax credits available. The information relates to 2008 and 2009, the most recent year for which the necessary detailed information is available. A breakdown of these estimates of cost by income deciles is not available and could not be provided without undertaking an extensive and costly development of the Revenue tax model.
