Oireachtas Joint and Select Committees

Thursday, 13 June 2019

Public Accounts Committee

Business of Committee

9:00 am

Photo of Seán FlemingSeán Fleming (Laois, Fianna Fail)
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I am happy to hold it over. We had a preliminary discussion the last day, but there is no problem with having a more detailed discussion at a future date. Is that agreed? Agreed.

The next item is No. 2193B from Mr. Niall Cody, Chairman of the Revenue Commissioners, dated 27 May 2019, responding to recommendation No. A17 of this committee's fifth periodic report regarding the threshold for inclusion in the category of high-wealth individuals. It is a very important and detailed letter in which there will be significant interest from journalists and others. The Comptroller and Auditor General included a chapter on this issue in his last report, in which he suggested that the threshold be reduced from €50 million. In our periodic report, we likewise made a detailed recommendation to lower the threshold. The report of the Chairman of the Revenue Commissioners vindicates the work this committee has done on the issue in recent months. He acknowledges the recommendation in our fifth periodic report and states that Revenue has completed its review, as requested by us, with a recommendation of lowering the threshold for high-wealth individuals to persons having wealth greater than €20 million.

This was agreed by the board of the Revenue Commissioners on 16 May 2019. The implementation of this recommendation will result in an additional 475 cases being managed by the high wealth individual division. This important improvement is a result of our work and recommendations. I thank the Revenue Commissioners for responding in such a forthright manner.

The Revenue Commissioners have produced a case base review document attached to this letter which we will publish but I want to highlight the significance and relevance of this. Up to this point, the threshold for net assets was €50 million and there were 200 high wealth individuals on the books and 278 associated cases. Lowering the threshold to €20 million will add 475 primary cases. There will be close to 700 on the list where there were previously 200 and that has to be a good result. These people may not all be resident here for income tax purposes. They may have property here or investment income. The Revenue Commissioners use three sources of data for this study: their own data, third party data and external sources. In their own data they considered disposal of assets or acquisitions over €5 million, gifts of inheritance, stamp duty, trusts, local property tax, which they considered for one year, income and ownership of property. That led them to compile a significant list. They then examined third party data for people with accounts of greater than €20 million, which showed up in the deposit interest earned, investment from undertakings and people who had income from directors' fees, rents, pensions and other categories. The external sources data was the 2018 rich list that we see published in The Sunday Independentand The Sunday Times. The Revenue Commissioners compared those lists with their own lists and made sure that anybody on both lists was examined. That does not mean that everybody examined was necessarily included in the final list.

The Revenue Commissioners said that there were 68 taxpayers identified, 35 of whom were also identified from the above criteria but they did not come into the division because they fell into other categories, they might have been beneficial owners or resident taxpayers appeared to have large shareholdings in high wealth non-resident companies, and a combination of shareholdings. They examined them very closely. In addition to the 475 individuals, 68 were examined in further detail who did not meet the criteria. All in all, it was a good day for the Irish taxpayer, the public, the Comptroller and Auditor General's report, the Revenue Commissioners and the Committee of Public Accounts. We are seeing the value of the work being done here. I compliment everybody from the Revenue side especially on their willingness to take on board in an open way the recommendations of the Comptroller and Auditor General and the Committee of Public Accounts, and on coming back to say they were being implemented forthwith.