Paschal Donohoe (Dublin Central, Fine Gael)

I thank the Cathaoirleach for the opportunity to appear before the committee today to discuss the 2025 Revised Estimates. As Minister for Finance, I will be discussing the four Votes within the finance group of Votes. These are: Vote 7 - Department of Finance; Vote 8 - Office of the Comptroller and Auditor General; Vote 9 - Office of the Revenue Commissioners; and Vote 10 - the Tax Appeals Commission.

The net funding allocation sought for the finance group of Votes for 2025 totals just over €628 million, which compares to a 2024 group total of almost €590 million, an increase of just under 7% or almost €39 million. I will deal with Vote 7 first. The Department of Finance is structured around one directorate, the economic, fiscal, banking and financial services directorate. The mission of the Department is to lead in the achievement of the Government's economic, fiscal and financial policy goals, having regard to the commitments set out in the programme for Government. The net allocation sought for the Department of Finance Vote in 2025 is €50.7 million, of which some €11 million is provided for a fuel grant scheme for disabled drivers. The Department’s allocation provides for both administrative and non-administrative costs. The single biggest cost remains payroll, at €31 million, or 60%, of the total Estimate. A further €5.8 million, or 11%, is provided to cover facilities and non-pay administrative costs. The remaining allocation funds other services such as the Financial Services Ombudsman, legal costs and other necessary outlays.

The allocation for Vote 8, the Office of the Comptroller and Auditor General, C and AG, is applied towards a single audit and reporting programme. The Comptroller and Auditor General is an independent, constitutional officer whose mission is to provide independent assurance that public funds and resources are used in accordance with the law, managed to good effect and are properly accounted for. The office assists the Comptroller and Auditor General in his statutory functions and is staffed by civil servants. The C and AG’s financial audit role covers around 289 sets of accounts produced by public bodies. Together, these bodies had financial transactions with a value of over €350 billion last year. The net allocation for this Vote in 2025 is €11.6 million, which is an increase of approximately 4% on 2024. This is to fund higher staffing costs.

The Office of the Revenue Commissioners, as our tax and customs administration, plays a vital role in our economy by collecting taxes and duties due to the State and in implementing customs controls. Revenue has been allocated a net budget of just over €562 million, an increase of just over €30 million on the net budget for 2024. The original net budget for 2024 was just over €512 million. In addition, there was a Supplementary Estimate granted of just under €20 million. The total net budget for Revenue in that year was just over €532 million. Over three quarters of the total net budget allocation is related to payroll for an employment ceiling of 7,163 staff.

In 2024, Revenue collected a record €152.9 billion in gross tax receipts, including almost €31 billion collected by Revenue on behalf of other Departments and agencies. The total relative cost of administration remains low, at 0.39% of net collections, and Revenue continues to maintain high levels of compliance for the taxes and duties under its care and management.

In 2025, Revenue will support the Department of Finance in the ongoing evaluation and development of the tax and duty policy framework, particularly in the context of global tax changes and EU developments in the VAT and customs arenas. Revenue continues to manage EU external borders through its frontier management and customs functions, ensuring overall supply chain safety and security while facilitating trade. During 2024, there was a further increase in the number of customs declarations. A total of 60.5 million declarations were processed in 2024 compared with 50.3 million in 2023, an increase of one fifth. However, in this context, some 90% of freight vehicles arriving from the UK were “green routed”, which means they travelled freely on arrival into the State without any undue delays arising from customs formalities. Revenue will continue to implement customs controls in a manner that encourages legitimate trade, enhances competitiveness and supports business, while managing compliance risks. Customs enforcement also led to over 21,000 detections and seizures valued at €361 million in 2024.

Revenue maintains its risk-based approach to managing instances of non-compliance. In circumstances where timely compliance or meaningful engagement was not forthcoming, Revenue continued to pursue those who did not meet their tax and duty obligations. In 2024, there were 310,989 risk management interventions carried out with a yield of €591 million. As 2025 progresses, Revenue will continue to respond to the challenges of international tax reform, while implementing and supporting tax initiatives and collecting the taxes, duties and other charges on behalf of the Exchequer.

Finally, Vote 10 for the Tax Appeals Commission, TAC, has a net budget allocation of €3.9 million, an increase of 3% on the 2024 Estimate. The 2025 Estimate is to provide for the TAC to advance its programme of modernisation and reform and to address its caseload, while also meeting its obligations as an independent Civil Service entity.

I thank members for their attention and I commend the 2025 Revised Estimates to the committee. I am happy to answer any questions that members may have.