Brian Hayes (Dublin South West, Fine Gael) | Oireachtas source

The black economy is a problem within our society. It deprives the Exchequer of much-needed revenues and poses a significant threat to legitimate business. For these reasons, tackling the problem is treated as a priority for this Government and by its agencies, in particular the Revenue Commissioners. With regard to the Deputy's proposal that all invoices issued for farming contracting services carry a VAT or PPS number, I am aware of this proposal as it was discussed in the Dáil in the context of the Committee stage debate in a previous Finance Bill.

Farmers are not obliged to register for VAT in relation to supplies of agricultural produce. A farmer who is not registered is known as a flat-rate farmer and will not have a VAT number. Under VAT legislation, the invoice or settlement voucher issued in relation to a supply of agricultural produce or services is required to include the full name and address of the flat-rate farmer who supplied the goods or services. There is no requirement under VAT legislation to include a PPS number on any invoice or similar document issued to a customer. However, the recipient of the goods or services must have a valid invoice or settlement voucher that sets out the name and address of the supplier, the details of the supply, the amount charged, etc. This document must be retained for a period of six years by the person who is claiming a deduction from income tax in respect of the expenditure. This ensures that a satisfactory audit trail exists between both parties.

I am conscious that the need to tackle the black economy must be balanced against imposing onerous additional administrative burdens and costs on business. New measures to improve compliance are always being considered and it is important that those measures are proportionate. My officials have discussed this issue with the Revenue Commissioners and it has advised that regular reviews and compliance operations in this sector are carried out. My Department and the Revenue Commissioners have received general complaints about tax evasion in the industry in the past from farming representative bodies but, when requested, no specific details of non-compliance or tax evasion have been submitted. If information of this nature is presented, it will be treated with total confidentiality and it will be fully investigated.

As stated during the discussion on this issue last year, if contractors would like to make information available to us on a totally confidential basis, we will follow up on it. We do not believe the problem as identified by the Deputy is widespread, although I do not think that is what he is suggesting. This is the reason we have not received any specific complaints from contractors of this particular problem.

It will clearly be kept under review. The key issue is whether we are putting a significant burden on farmers and the Revenue Commissioners because of the additional layer of bureaucracy. If the problem is as widespread as some people suggest, a solution can be found. We need to have evidence of it and thus far we have not found it.