Wednesday, 23 October 2013

Ceisteanna (77)

Finian McGrath


77. Deputy Finian McGrath asked the Minister for Finance if jobs will be destroyed and businesses placed under massive pressure when they are forced to file early tax returns under the new EU rules; and if he will make a statement on the matter. [44906/13]

Amharc ar fhreagra

Freagraí scríofa (Ceist ar Finance)

Under the regulations known as the "Two-Pack" which were formally adopted on 30 May 2013, a common budgetary timeline is being introduced for all Euro Area member states. Specifically, the draft budget for central government and the main parameters of the draft budgets for all the other sub-sectors of the general government must be published by the 15 of October each year; draft budgetary plans in a common format must be submitted by all Euro area Member States not in a programme of assistance; and the budget for the central government must be adopted or fixed upon and published by the 31 of December each year.

In light of these requirements, the Government decided to bring Budget Day forward from the first week in December to on or before the 15 of October from now on. Accordingly, I presented Budget 2014 on Tuesday last, 15 October. The Government also decided that the Finance Bill should complete its passage through the Oireachtas by the 31 of December each year.

The Deputy will be aware that one of the most critical elements of the Budget process is the accuracy of systems for forecasting potential revenue yield in the year in question prior to the Budget actually taking place. In the context of a December Budget Day, the availability prior to the Budget of information on cumulative tax yields to the end of November gave a high degree of certainty to the estimation of potential outturn for the year. For example, cumulative tax yield to the end of November 2012 was €33.8bn, which represented 92% of the full year outturn of €36.6bn. On the other hand, cumulative yield to end September, at €26.1bn, represented only 71.3% of the eventual outturn.

The scope for unanticipated events which would lead to either a higher or lower than projected outturn is considerably increased in the context of an October Budget. In addition the ability to project future yield is compromised. Consequently, measures which would result in improvements in the availability of information or increases in the proportion of total yield already available prior to the Budget have to be considered. The main areas where scope exists to introduce such improvements relate to the income tax Pay & File arrangements and on 11 October I initiated a consultation process on a revision of the existing arrangements. I will consider the results of this consultation process when drafting, as a Committee Stage amendment to the forthcoming Finance Bill, the necessary measures.

I would reiterate to the Deputy that these changes are required as a result of the move to an earlier Budget Day, necessitated by the adoption of the Two-Pack and will provide increased certainty around the annual tax take. I would not accept the suggestion that such changes are a threat to jobs or businesses. On the contrary, the more information available at Budget time, the more accurate forecasting can be, thereby increasing levels of certainty for business and employment.