Mr. Seamus McCarthy:

The account of the receipt of revenue of the State collected by the Revenue Commissioners comprehends receipts of taxes and duties remitted by Revenue to the Exchequer and receipts collected by Revenue on behalf of others. The 2017 account shows that net receipts of taxes and duties amounted to a total of €50.8 billion, an increase of €2.8 billion, or 5.8%, by comparison with the figure for 2016. Receipts related to VAT, income tax and corporation tax together accounted for over 80% of net tax receipts.

Receipts collected by Revenue and remitted directly to non-Exchequer agencies and funds also increased substantially. Net receipts totalled €10.8 billion in 2016, increasing to €12.2 billion in 2017, an increase of around 13.5%. Pay related social insurance, PRSI, contributions account for the majority of this category of receipts. A significant part of the increase in that category of receipts in 2017 was in respect of the VAT mini one-stop-shop, MOSS, scheme, which implements place of supply based VAT rules for businesses engaged in electronic supply of services cross-border. Transfers to other EU member states increased from just under €400 million in 2016 to almost €1.2 billion in 2017.

Revenue's administration and operational expenses are charged to Vote 9, Revenue Commissioners, rather than the Revenue account. The 2016 appropriation accounts show that the total spent by Revenue in the year was €397 million. Taking account of appropriations-in-aid of €75 million, net expenditure under the Vote amounted to €322 million. The surrender for the year was €8.8 million.

There were three chapters in last year's report on the accounts of the public services dealing with Revenue-related issues. The committee has already examined and reported on the chapter dealing with corporation tax.

Revenue is obliged under legislation to collect tax in a timely and efficient way, including the pursuit of any tax debt outstanding. As at 31 March 2017, the total value of gross tax debt outstanding was just under €2.3 billion. The value of outstanding debt has increased since 2015, reversing the downward trend of the previous five years. Revenue has attributed the increase in recent years to an increase in the value of tax debt outstanding under appeal and, therefore, not currently available for collection. Tax debt under appeal in March 2017 accounted for 48% of the total. Our analysis also found that €661 million or 29% of the total tax debt was classified as collectable, but it was not subject to either payment agreements or enforcement proceedings. About one third was recently identified as debt. Much of the remainder was at various stages of investigation or review but some debt was not under investigation.

Revenue wrote out a total of €211 million of debt in 2016 and active pursuit of that payment ceased. It included €1.6 million in around 512,000 cases where small balances, an average of just over €3 per case, were written out automatically. The remainder was higher value debt which was written out on a case by case basis, with more senior authorisation for higher debts written out. The most frequent reasons for such debt write-outs are liquidations and businesses ceasing to trade.

Chapter 22 deals with delays in transferring certain tax receipts to the Exchequer, which resulted in the accumulation of deposits in a Revenue holding account at the Central Bank at year end. The problem arose because the receipts for the two tax heads had not been matched with the appropriate taxpayer records in a timely way. Encashment tax is a standard rate income tax deduction made by banks and stock broking firms when they make or receive certain payments. Encashment tax receipts of just under €31 million which had accumulated in the period 2012 to 2016 remained unallocated to taxpayer records at the end of 2016.

Since the start of 2015, companies which qualify for a film tax credit are required to apply film withholding tax when they make certain payments to non-resident artists from outside the European Union and remit the amounts collected to Revenue. Accumulated film withholding tax receipts of €1 million remained unallocated to taxpayer records at the end of 2016. Revenue subsequently developed systems to ensure more timely allocation of such receipts to taxpayer records. The accumulated receipts of both taxes were allocated to customers records during 2017.