Brian Cowen (Laois-Offaly, Fianna Fail)

The provisions of section 848A of the Taxes Consolidation Act 1997 govern the operation of the scheme for tax relief on donations to eligible charities and other approved bodies. The administration of those provisions is the responsibility of the Revenue Commissioners. To avail of the donations scheme a charity must be specifically authorised by the Revenue Commissioners for the purposes of the scheme and that authorisation falls to be renewed every five years.

The donations scheme was introduced in 2001 and a substantial number of authorisations under the scheme were issued in the years immediately following its introduction. Therefore, many of these are now due for renewal and, as part of the routine renewal process, the Revenue Commissioners are carrying out a programme of reviews to ensure that charities which have been authorised under the donations scheme are continuing to comply with the terms of their authorisations. This review involves contacting these charities and seeking their accounts and other relevant information.

There has been some media speculation recently that this exercise was triggered by fears that charity organisations were defrauding the State. However, the Revenue Commissioners have no evidence that there are significant or widespread problems in the sector. The level of review activity is in part a product of the level of authorisations coming up for renewal at the same time but it is also an ongoing feature of Revenue's compliance monitoring activity.

There are no proposals under consideration to amend the legislation governing charitable tax status, although the Charities Bill, which completed Committee Stage recently, provides for the appointment of a new charities regulator and sets out a framework for better regulation of charities. However, the Revenue Commissioners will retain responsibility for the administration of the donations scheme and charitable tax exemption.

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