Paul McGrath (Westmeath, Fine Gael)

My amendment No. 5 also relates to this issue. We are talking about tens of thousands of PAYE workers who have tax deducted from their income on a weekly or monthly basis and at the end of the year have paid more tax than that for which they were liable. It has been estimated that in excess of €300 million has been repaid, but a considerable number of taxpayers who have overpaid in terms of their tax contributions have not sought a refund of such overpayment.

It will be difficult to bring taxpayers' attention any more to the fact that they may have paid too much tax. Many people do not understand the tax system. That is the bottom line. They do not understand how tax credits work. I meet such people regularly in my clinic and I am sure many other Members have constituents call to their clinics with their tax documentation and P60s who do not have a clue about how their tax is computed. This is a major difficulty. I do not know how we will overcome this problem. I do not know how we will get people to realise how the system works, how their tax is computed, how they calculate whether they have paid too much tax and, if they have, how they reclaim the overpayment.

The Minister will correctly advise that documentation is included with an assessment that is issued every year by Revenue, but generally people do not understand it. They receive a page informing them of their entitlements. Many of them are not able to understand it, they do not read it properly and they do not understand how the tax system works. How will we get to a position where such overpayments can be identified? The Minister needs to identify whether the system used by Revenue shows when a repayment is due to a taxpayer and whether it ensures a repayment is made without the taxpayer having to apply for it. I understand the computer system does not operate in that way and such a programme needs to be built into the existing system to ensure that safeguard is in place to ensure that taxpayers are issued with a tax refund in respect of overpayments of tax.

The Central Statistics Office figures should also be examined. When they are compared with the figures produced by Revenue, it is clear that some people are entitled to tax refunds. I have been of the view for many years that the question of family income supplement should be tied in with the Revenue Commissioners. When the Department of Social and Family Affairs examines the amount paid out in family income supplement and compares it with income returns across various bands of workers and so on, it is generally estimated by the Department that there is only approximately a 50% uptake of family income supplement compared with the figures relating to income returns. Surely this could also be tied in with the Revenue to ensure that if a person falls within a particular income level, family income supplement could be incorporated in conjunction with tax payments. In that way people who would fall within those categories would automatically get a refund, not of tax but in the form of a payout from Revenue. Would that not make much more sense and help to improve the system by ensuring people who pay their fair share of tax are not overcharged and do not have to go to the trouble of having to apply for a tax refund? Will the Minister consider those points? There is not a magic formula for ensuring that taxpayers who have paid too much tax get a tax refund. I suppose the system as it works will have to take some kind of initiative from the taxpayer. There may be a need for an information campaign to ensure that people have an easier understanding of tax affairs, such as the amount of tax they pay and the tax credits due to them.

I would like to discuss the introduction of tax credits in recent years. I read recently that as few as 10% of people whose refuse is collected claim from the Revenue Commissioners the tax credit associated with refuse collection. I accept that the tax credit of €40 for one's refuse collection is not much, but those who do not claim it are probably those who would benefit most from it. What is the level of uptake of the tax credit of approximately €40 for trade union membership? I imagine that if one compared the number of trade union members in the country with the number of those who seek the tax credit associated with such membership, one would find that there is a major shortfall in that regard. Perhaps the Minister can give the relevant figures.

There is a significant shortfall in the number of people applying for the tax credit to which they are entitled in respect of the annual health costs they incur when they pay for prescriptions, visits to the doctor and dental treatment, which can be extraordinarily high. I recently met a person who had been paying nursing home charges for a relative without realising that such charges are tax deductible. The person in question was paying tax at the higher rate of 42%. I do not know where the fault lies. We need to do a better job of informing people of their tax entitlements in a simplified way. Such people need to be told how to go about getting refunds of tax, for example. I ask the House to support amendment No. 5.

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