Joan Burton (Dublin West, Labour)

I move amendment No. 3:

In page 11, between lines 11 and 12, to insert the following:

PART 1

TAXPAYERS' ADVOCATE OFFICE

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.

This Labour Party amendment provides for the establishment of a taxpayers' advocate. The reason for such a role is the well-documented situation which has arisen over the past number of years whereby many taxpayers, and PAYE taxpayers in particular, fail to claim the reliefs and allowances available to them. I refer in particular to the failure to claim tax relief on medical expenses, refuse charges and several other payments. People who have professional expertise in preparing tax returns or who can take advantage of professional advice on availing of reliefs tend to claim the maximum to which they are entitled under law. With regard to pension relief, for example, we know from the debate we held on Committee Stage that the Revenue Commissioners are well-equipped to deliver tax reliefs rapidly to people who have elaborate private pension funds worth several tens of millions of euro once they produce the appropriate documentation. Even though the Minister for Finance last year curtailed pension reliefs to €5 million, Revenue was able to quickly issue significant numbers of exemption certificates to private pension schemes which exceeded the limits set by the Minister. However, ordinary PAYE taxpayers who do not have the advantage of expert advice are restricted to a four-year period when claiming reliefs to which they may have been entitled in the past.

While the Minister has denied that the structure of claiming is excessively burdensome, certain of his Report Stage amendments are proof of the validity of the argument put forward by the Labour Party. For the past several years, we have argued that the most notorious example of this issue was medical expenses. With a threshold in operation, people have to keep all their medical receipts. A young family may have visited the doctor at the beginning of the tax year and then incurred further medical bills in November or December. I will not speak for other areas, but the routine GP fee on the north side of Dublin is €50 per person. Many doctors have discontinued the former practice of charging a single fee when they saw a parent and child together. Everybody is now charged a separate fee and many GPs also charge a full fee for return visits, so the expenses add up quickly for families.

I am glad the Minister has proposed an amendment to section 9 which would further simplify payment procedures by removing both thresholds to relief for medical expenses. This reform is long overdue and has been brought on the eve of the general election but it is none the less welcome. The amendment has been brought because the attention of the Minister and the Revenue Commissioners has been drawn to the significant amounts of relief which have gone unclaimed, particularly in respect of PAYE taxpayers. Estimates of the amount have varied between €200 million and €400 million. The cumulative value of the unclaimed relief could easily be more than €500 million. We are seeking a change in the playing pitch in favour of the honest, compliant taxpayer who is unable to employ a battery of accountants and tax advisers to create elaborate schemes so that the Revenue can return money to them rapidly and efficiently but who must keep a shoe box full of receipts to qualify for tax relief or retain a record on his or her computer of his or her various expenses.

The Minister has repeatedly claimed it is easy for people to claim relief. However, when Committee Stage concluded the Minister must have done a little research because he swore on Committee Stage that an abolition of thresholds was entirely unnecessary and not something the Revenue would do. He even hinted the Revenue would find it very difficult to deal with all the claims that would result as a consequence of abandoning the thresholds. However, on the eve of an election he has accepted the Labour Party's argument and he has tabled an amendment to simplify the repayment procedures for relief on medical expenses by abandoning the threshold. Anybody who has medical expenses should make sure his or her doctor or practice has a computerised record of such expenses so that a summary can be provided of all the fees paid by an individual, similar to that provided by a chemist. Once computerised systems are installed in all doctors' surgeries, it will not be long before taxpayers will be able to claim this relief at source through an arrangement similar to that provided for mortgage interest relief.

I am glad the Minister has finally accepted the Opposition's argument. Why, therefore, will he not go the whole hog and provide for a taxpayer's advocate so that somebody independent of the Revenue can examine what it does and point out how to improve the scenario for the ordinary, compliant taxpayer by taking various initiatives and creating a structure that would recognise the excellent work done by the Revenue in recent years to modernise and upgrade its operations? Text calling is very good and the Revenue's on-line service has been a boon particularly to businesspeople. It will ultimately be a boon to PAYE taxpayers. Why not accept the need for an advocate for taxpayers who would have an oversight role? The Minister replied on Committee Stage that he examined the role of similar offices in other countries such as the US. However, the issue is the empowerment of taxpayers and citizens. While the Revenue has awesome legal powers to encourage and, ultimately, force people to pay their taxes, somebody must be in place to champion taxpayers, particularly PAYE workers, so that they receive their just desserts.

The Minister could make a mark in his legislative swan song. While he has ambitions to hold a higher office, I hope that will not happen in the next Dáil and that Opposition Members will be on the opposite side of the fence this time next year. It would be good if the Minister acknowledged the strength of the Labour Party's case. A positive development in modern democracies is to allow State offices such as the Revenue, which, properly, has awesome powers, to be overseen by officers who are determined to give individual compliant taxpayers their dues.

When we raised this issue first three years ago, the Minister was not even prepared to acknowledge the extent to which people failed to claim their full entitlements. The Revenue has been sitting on a tidy sum for the past ten years because individuals failed to avail of the relief and allowances to which they were entitled. The relatively low cost that would arise out of the advocate's function would be easily met by the funds not claimed by taxpayers. The other reason for the failure to claim relief is the changes in the economy. People are employed on atypical contracts and work atypical hours. Some people work two or three jobs on contract and otherwise while others are self-employed, although they could be considered to be employees in traditional terms, particularly those working in the construction, forestry and meat industries. Hundreds of thousands of people are employed in various circumstances and their tax affairs are complicated. Because they do not have easy access to an advocacy service, they sometimes ignore their tax affairs and end up with a business disaster or they are put on emergency tax, in which case the Revenue and the main contractor or employer are fine. Young workers in the construction industry do not pay into a pension fund and they have no savings but they pay plenty of tax.

A taxpayer's advocate would address this new feature of business life in Ireland and a better resolution to this problem would be achieved, which would serve these taxpayers well. The case for such an advocate is very strong. The Minister has acknowledged the issue in his amendment to section 9 by abolishing the threshold on medical expenses, which will make it much easier for taxpayers. I hope they will become aware that if they retain their medical bills they will be able to claim tax relief even after one visit to their doctor. The ordinary taxpayer will be in the same position as those involved in small pension funds who claim significant amounts from the Revenue. I hope by removing the thresholds, more people will claim what is due to them. However, there is an absolute case for the creation of an advocate's office. Hopefully, if the Labour Party is in Government next year, it will be in a position to proceed with that.

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