Joan Burton (Dublin West, Labour)

The Minister does not see the bigger picture. This year, 400,000 people were left without tax certificates until the week before last. The Revenue Commissioners have a number of new computer systems, including the revamped ITS systems, but the Minister is blissfully unaware that many people have serious questions about their entitlements to their basic tax credits, which they have not been able to establish. Where a woman has been at home on extended maternity leave, her husband will have claimed some of her credits. When she returns to work, he is in for a nasty shock unless the Revenue Commissioners can come up with amended certificates quickly.

At the moment some Revenue Commissioners offices are practically under siege, to the extent that in recent weeks, they had to suspend telephone responses because the system was overloaded with queries from the public about basic information. Of course the Revenue Commissioners are making strides with on-line systems but there are many problems with the Revenue Commissioners.

A young person taking up a job and renting an apartment who is being taxed on an emergency basis may find those tax deductions make the difference between being able to pay the rent and not. The Minister is far too sanguine about how well the system is working. There is a need for an advocacy structure whereby taxpayers can get their just entitlements. Relying on the Minister's goodwill, and that of the Revenue Commissioners, is not enough.

When the Finance Bill was published, the Minister talked about the additional powers he would confer on the Revenue Commissioners to look at individuals' bank accounts to find income that had previously been undeclared. I have been stopped on many occasions by large numbers of older people, whom I am confident are tax compliant, who are scared about the Revenue Commissioners going through their various bank accounts over the years to see if they were not tax compliant. I told people that I did not think they had anything to worry about because I could not think of anything else to say. It has been difficult, however, to get information from the Minister about the approach he is taking.

This time last year when the inquiries were starting into single premium insurance policies, I asked the Minister to say that people who took these up legitimately with a lump sum at retirement would have no problem with unpaid tax. This is where the office of an advocate is very important. We need someone to say to tax compliant people, particularly older people, that the Revenue Commissioners are getting the extra powers to investigate those who have cheated on tax in the past, not to investigate those who have been tax compliant during their working lives.

There are many frightened people because the Minister has failed to state that the new powers in the Bill were for tax defaulters, approximately 10,000 people, who could be identified and who owned a percentage of the single premium insurance policies. If the Minister adopted an approach which favoured the compliant taxpayer, he would tell people that they have nothing to worry about, and the advocate's office could tell people that if their tax returns were broadly in line with requirements, they have nothing to worry about. Instead, needless anxiety is caused to many people who were compliant. In the meantime, the people who illegally evade tax do not give a damn about the regulations — their motto is "catch me if you can". They do not lie awake at night worrying about some small bank account being investigated by the Revenue Commissioners. There must be a greater level of communication so those who paid for the progress made by this State are not now frightened about what the Revenue Commissioners will visit upon them.

Subcontractor status and certificates in the construction industry demonstrate the need for an advocate's office. More than 200,000 people work in construction and the vast majority are treated as subcontractors. Young men earning €1,000 in the building trade can be told by their employer to get a subcontractor certificate and that he will look after everything for them. They find it hard to understand the complexity of the situation and, subsequently, unless they have been very careful to comply with all the regulations, it is difficult for them to properly claim refunds and credits when they have been on the emergency rate of tax with deductions at source by the main contractor. It is vital, from the point of view of preserving the integrity of the PRSI system, that these workers be treated as employees. They should pay a lower rate of income tax and they and their employer should pay PRSI. God only knows what has been happening in the construction industry during the recent boom years. It is in the interests of compliant taxpayers, honest builders and those in the construction industry who are treated as subcontractors but are essentially employees that this issue is addressed and an office of an advocate is in a position to do so.

On pensions, volume three of the report on tax breaks produced by the Department shows comprehensively that those on very high incomes enjoy the overwhelming tax advantage in the area of pensions because one would probably need to have an income in excess of €250,000 to benefit from the relief available on pensions. The report highlighted the example of two individuals with pension funds of €100 million on which each received a tax break of €25 million. Not only will the individuals in question be able to invest the remainder of their funds in approved retirement funds, ARFs, attractive vehicles from a tax avoidance point of view, they will probably be able to pass these funds on tax free to their spouses and, in turn, children.

Only 52% of the population have made provision for a pension. The complexity of signing up to a PRSA and the fact that various financial institutions rip off small savers and investors by applying high costs to products such as PRSAs indicate that the tax system is tilted strongly in favour of wealthy high rollers who can put €250,000 or €500,000 into a pension fund without difficulty. In a fair tax system an advocate for taxpayers' rights would step in and ask what benefits the system was delivering to the 50% of the population who do not have pension coverage. Currently they receive few advantages, even to the extent that information on taking up tax products is scarce.

Under the Bill, a person who invests €7,500 of an SSIA in a pension product will receive a bonus of €2,500 as a special concession. On the other hand, a person who invests €100,000 annually in a pension product will receive from the Revenue Commissioners a tax break of €42,000. Under this Bill, a person with no pension provision on the lowest rate of tax receives a bonus of €2,500, whereas a person who is sufficiently wealthy to be able to invest or have his or her employer invest €100,000 of his or her salary in a pension fund will receive a tax benefit of €42,000. That is the scale of the inequality between the wealthiest and those who have no pension provision.

The argument in favour of appointing an advocate to ensure ordinary taxpayers get their fair due is unanswerable. While taking out newspaper advertisements and enabling those with technical knowledge to use Revenue's on-line service are positive developments, they are not sufficient to address the fundamental inequality of the tax structure. The whole system is geared towards those who can afford to pay accountants and tax advisers to look after their tax affairs, while those at the lower end of the scale are not facilitated in a manner of which we can be proud.

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