Dáil Éireann Debate, Wednesday - 15 April 2015
184. Deputy Michael McGrath asked the Minister for Finance the current rate of interest charged by the Revenue Commissioners in respect of late payment of tax liabilities; the way this has changed over the past ten years; his plans to review the rate in view of the current low-interest rate environment generally; and if he will make a statement on the matter. [14826/15]
Amharc ar fhreagraI am advised by Revenue that the current rate of interest charged in respect of late payment of Income Tax, Corporation Tax, Capital Gains Tax, Capital Acquisition Tax, Local Property Tax and Stamp Duty liabilities is 8% per annum (0.0219% per day), while the rate in respect of all other taxes, for example PAYE/PRSI and VAT, is 10% per annum (0.0274% per day).
These rates came into effect on 1 July 2009 as provided for by the Finance Act 2009. The equivalent rates prior to that date were 10% per annum (0.0273% per day) and 12% per annum (0.0322% per day). These statutory charges are designed to compensate the Exchequer for loss of revenue through late payment of tax, to encourage timely payments in future and to ensure equity for those taxpayers who pay on time.
Revenue has confirmed to me that regardless of the statutory basis for the imposition of interest in respect of late payment of tax, it always notifies taxpayers in advance of the first interest charge being imposed that continued late payment will result in the sanction being applied retrospectively unless behaviour changes.
In regard to outstanding tax liabilities generally, I am aware that Revenue's clear preference is always to engage positively with viable taxpayers or businesses experiencing temporary cashflow difficulties rather than deploying the various sanctions at its disposal to secure payment. However this can only happen where there is honest and open engagement by the taxpayer/business in identifying and agreeing a mutually acceptable solution. Where there is no such engagement then Revenue has no choice but to use its debt collection/enforcement options, including charging interest on late payments as appropriate to protect the Exchequer.
Therefore, taking account of Revenue's overall balanced approach to charging interest on late payment of tax, which is both effective and reasonable, I have no plans to revise the rates currently applied at this time.
