Joan Burton (Dublin West, Labour)

I move amendment No. 1:

In page 11, between lines 13 and 14, to insert the following:

1.—The Ombudsman shall include in her annual report a special report on the overpayment of tax by PAYE taxpayers, and on the take up of credits by such taxpayers, and the branch of her office dedicated to ensuring that the take up of credits is readily available to all taxpayers, and refunds made as rapidly as possible where this arises, shall be known as the Taxpayers' Advocate Office.

The purpose of this amendment is to oblige the Ombudsman to append to his or her annual report a special report on the overpayment of tax by PAYE taxpayers. The Minister for Finance, Deputy Cowen, has come into the Dáil with no prior notification of the detail of an amendment which serves basically to facilitate the tax evasion and tax avoidance industry. This represents a complete watering down of what the Minister promised at the initiation of the Bill and in the debate on Committee Stage.

Amendment No. 1 serves to represent those ordinary PAYE taxpayers who are at significant risk of receiving incorrect tax-free certificates because of the way the system functions. The Minister acknowledged in the debate on Committee Stage that in the last year for which figures were available, more than €300 million was due in refunds to PAYE taxpayers because of the absence of proper tax certification, either because of a change of business, employer or marital status, in the event of retirement, or following a transition from self-employment to employment or vice versa.

In this scenario, compliant taxpayers, which includes the bulk of PAYE workers, are entitled to be facilitated by the Government in ensuring that where they overpay tax, there is a rapid right of recourse to the Revenue Commissioners and that the money is repaid easily and quickly. It is not good enough that the Revenue Commissioners are the judge and jury in this regard. The Labour Party has advocated the introduction of a taxpayers' advocate, a person who will ensure that the ordinary taxpayer gets some justice.

We know all about the tax avoidance schemes introduced by the former Minister for Finance, Charlie McCreevy, for the very wealthy. The other side of the coin is that ordinary PAYE taxpayers are overpaying tax every year and are entitled to refunds totalling more than €300 million. There has been no attempt by the Government to ensure that an independent office such as that of the Ombudsman should append an annual report which details the work of the Revenue Commissioners in this area.

It is welcome that the Minister proposes in this Bill to extend the Revenue Commissioners' on-line services to PAYE taxpayers. However, this does not address the increasing problem of the significant numbers who are overpaying tax. The figures are small in percentage terms, representing approximately 2% of the total, but €300 million is significant in anybody's language and is important to those affected. During the Committee Stage debate, the Minister found it difficult to understand that ordinary taxpayers may not be confident in dealing with the Revenue Commissioners and instead read out a list of offices, telephone numbers and other Revenue services throughout the country.

There have been improvements in this regard but the provisions remain inadequate. There are many who do not deal properly with their tax affairs, either through fear or for some other reason. When people's circumstances change it is increasingly the case that they end up without the correct tax credits. If they are unaware of such errors, the Revenue Commissioners do not necessarily inform them of overpayments. What we advocate is a simple reform of the Office of the Ombudsman which would give her a duty of specifically reporting on this area.

I have not even dealt with the matters, raised repeatedly here, of the various tax allowances available to PAYE taxpayers such as rebates on refuse charges, medical fees and expenses and other designated expenditure. All the evidence suggests that a considerable number of PAYE taxpayers do not claim their entitlements to tax refunds on refuse charges and medical charges. Many general practitioners do not automatically give patients who pay medical fees a receipt. Many of the newer and group practices do, but to many individual doctors patient visits are considered a patient to doctor transaction and a full receipt is not made available.

What the Labour Party proposes in this amendment is therefore reasonable. The Minister would not listen to this proposal but he could listen to the tax industry, the accountants industry and, in particular, the banking industry. All those old ladies in Longford and other places who took out a single premium insurance policy which was invested overseas and was improper in terms of tax compliance, did not come up with that idea. A bank clerk, and not necessarily one in the front office of the bank, made that suggestion. Banks set up these schemes with the specific objective of facilitating tax avoidance which turned out to be tax evasion. We know this from the report on deposit interest retention tax.

As soon as the Minister had representations from various interests in banking, tax and accountancy advisory services, he significantly watered down what he told us he intended to do following the various scandals in terms of the recovery of many pots of gold. On the matter of tax evasion, the Minister's predecessor was fond of saying there was no pot of gold and that most people paid all their taxes. While most people in the PAYE sector pay their taxes, the experience of the past five years shows that there has been not one but many pots of gold to be recovered by the Revenue Commissioners when they went after people who defaulted in their tax liability through DIRT and various other schemes facilitated by tax advisers, accountants and banks. To date, no official at a senior level in the banking industry has taken responsibility. No one has taken responsibility. Probably another 10,000 people will have to deal with single premium insurance investments.

Whatever about a person coming up with the idea of opening a bank account abroad, a customer most definitely did not come up with the idea of the single premium investment policy which is to be investigated. I do not understand how the Minister can refuse to accept the Labour Party's reasonable amendment providing for a short report from the Ombudsman on PAYE taxpayers getting all the refunds to which they are entitled. At the behest of the tax advisory industry and banks, amendment No. 58 has been tabled, which significantly waters down what the chairman of the Revenue Commissioners calls for, namely, clear powers for the Revenue to prosecute the offence of aiding and abetting tax evasion and putting money overseas. The Minister has watered down provisions in that regard. He has also removed provisions from the Bill dealing with those who have indirectly facilitated the fraudulent evasion of tax by any other person. If that is not a little Fianna Fáil special for directors in banks, I do not know what it is.

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