Simon Harris (Wicklow, Fine Gael) | Oireachtas source

The Minister for Finance and I sincerely thank the Members on all sides who contributed to this debate. As the Minister stated, the reform of the tax appeals system will positively reform the role, functions and structure of the Office of the Appeal Commissioners and the tax appeals system. The Minister and I appreciate the welcome of various Deputies for this reform process. It will serve a dual function, first in providing transparency and increased certainty for taxpayers and, second, bringing about an enhanced and cost-effective appeal mechanism for tax cases, taxpayers and the Exchequer. It is timely to proceed with this reform process, which will see appeals being brought through the initial stages in a more streamlined fashion, with enhanced case management procedures to facilitate a more efficient and structured flow of appeals.

I will now outline the main reforms that are being introduced. The first is the formal confirmation of the independence of the commission and its appeal commissioners in the performance of their functions. There will be a new focus on flexible and active case management by the appeal commissioners in order to facilitate more expeditious and efficient processing and disposal of appeals. The appeal commissioners will now be obliged to try to conduct proceedings in as informal and flexible a manner as possible to facilitate the settlement of appeals by agreement between the parties and to avoid undue delay in dealing with appeals, except where this would be at the expense of not giving proper consideration to a matter under appeal. The appeal commissioners will have the discretion to dispense with hearings and to make their determination based on written submissions in the case of straightforward matters, subject to the agreement of the parties to the proceedings.

While public hearings will be the default arrangement, part or all of a hearing will be held in private on application by an appellant. I consider that this will meet the concerns of stakeholders, and particularly concerns voiced by Deputies on behalf of small business people. Concerns were expressed that small shopkeepers, for example, could find themselves involved in a public hearing, perhaps with customers in attendance, and with material from the hearing being reported locally. Such publicity could undermine their business, even if the appeal were upheld. The Minister appreciates Deputy Michael McGrath’s comments in this regard but also notes Deputy Pearse Doherty’s views on the need for transparency.

Currently, not all determinations are published by the appeal commissioners. Those that are published are available on the appeal commissioners' website. However, the Revenue Commissioners, as a party to each tax appeal, would have access to all appeal commissioners' determinations, which may give rise to a perception of advantage for Revenue. To promote transparency, a statutory obligation will now be imposed on the appeal commissioners to publish a report of their determinations in each appeal on the Internet within 90 days after notification of the parties. Published determinations will be suitably anonymised in cases where the hearing does not take place in public. I note Deputy Michael McGrath's support for this proposal.

Publication of determinations and of more information will provide taxpayers and tax practitioners with a valuable resource. This body of determinations will assist in interpreting tax statutes and be available for reference. The appeal commissioners will be able to dismiss an appeal where they consider it to be frivolous or where a taxpayer does not comply with directions given by the appeal commissioners in respect of the conduct of the proceedings.

Appeal commissioners will have a renewable fixed term of officeof seven years. The Minister for Finance will have power to reappoint a commissioner for a second, and final, term of seven years. However, there will be a built-in mechanism to strengthen commissioners' independence providing that, where a commissioner is not so reappointed, the Minister must lay the reason for this before the Oireachtas. The Bill contains provisions for the removal of a commissioner from office for a variety of specified reasons.

A requirement will now lie with the appeal commissioners to submit annual reports to the Minister for Finance, who will lay them before the Houses of the Oireachtas. Importantly, this rectifies an accountability deficit and will enable assessment of the efficiency and effectiveness of the office in regard to the adjudication and determination of disputes and other matters. Importantly, decisions of the appeal commissioners will now be final and conclusive, with entitlement to appeal to the High Court where the appellant or Revenue considers that the appeal commissioners erred in their determinations on a point of law only and not in regard to the facts. Statutory responsibility for preparation of a case stated for the opinion of the High Court will now fall to the appeal commissioners on receipt of a notice from the party seeking to appeal.

With regard to the proposed removal of the Circuit Court stage from the appeals process, which was referred to by Deputies Michael McGrath and Pearse Doherty, it can be validly argued that a complete rehearing of an appeal, as if the appeal commissioners had never made their determination, has several important disadvantages. It results in additional delay, particularly in regard to appeals outside the Dublin circuit, where it is difficult to get a case listed for hearing. Second, it has the effect of undermining the appeal commissioners stage of the process where a taxpayer does not fully engage and uses the initial hearing as a dry run for the Circuit Court. Moreover, the right to a rehearing can encourage taxpayers to make a second attempt at victory, even in circumstances where there are no real grounds for dissatisfaction with the appeal commissioners' determination. This runs counter to the principle that cases should be resolved as quickly and effectively as possible and have regard to the fact that court time is a scarce resource.

The reformed appeal system will be better resourced and more efficient with, for example, more flexible and active case management by the appeal commissioners, written and published determinations and a revised case stated procedure. There is little transparency in the current Circuit Court stage of the process in that hearings are held in private. Written determinations are rarely given and are not generally published. The process can also introduce delays into the overall appeal process.

There are a number of other tribunals or bodies from which there is only provision for further appeal, on a point of law, to the High Court, but not to the Circuit Court. These include An Bord Pleanála, the Financial Services Ombudsman, the Office of the Information Commissioner, the Social Welfare Appeals Office and the Workplace Relations Commission. Having heard and carefully considered all the views of stakeholders and of Oireachtas Members at the pre-legislative stage, the Minister and I remain of the view that retention of the Circuit Court stage could undermine the reform of the appeal process.

Provision is made for the giving of directions by the appeal commissioners to parties - for example, requiring a party to provide specified information, consolidating multiple appeals, holding preliminary hearings and adjourning proceedings. Time limits are streamlined and provisions are put in place, on request, for making persons other than the appellant party to the appeal, and for the dismissal of frivolous appeals.

It is fair to say many of Deputy Healy’s comments related to tax issues rather than the appeals process itself. The Minister for Finance will, of course, bear these views in mind in the context of the budget. Perhaps it would be more appropriate for the Deputy to raise these matters during the budget debate and associated debates rather than in this debate. We would obviously disagree significantly with the ideology brought to the debate by Deputy Healy but we will, I am sure, have an opportunity to debate that during the budget process.

I welcome Deputy Eoghan Murphy’s comments regarding www.taxtransparency.ie. I recall speaking on his Bill in this regard during a Friday sitting at a relatively early point in the lifetime of this Dáil. Second Stage was passed in the House. I will ensure that the Deputy’s views on making this tool available to all taxpayers, as outlined in the House this afternoon, are brought to the attention of the Minister for Finance in advance of budget 2016.

I will ensure that the views expressed by my colleague, Deputy John Paul Phelan, on the forthcoming budget, on some important matters regarding taxation and on where taxation can play an important role, not only in the redistribution of income - which seems to be the obsession of most media debates on tax - but also as a tool to create more jobs, investment and economic growth, are also brought to the attention of the Minister for Finance. I am sure he will give consideration to them in the remaining days before the budget.

I commend the Bill to the House.

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