Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I move amendment No. 4:

In page 39, line 19, after “appealed to” to insert “the Circuit Court or”.

I welcome the opportunity to move the amendment, which my colleague, Deputy Michael McGrath submitted. Of the 14 amendments in this group of amendments, six are in the name of Deputy Michael McGrath. When we have dealt with them, only one amendment will remain to be dealt with. This is the biggest element of the debate. Amendment No. 4 is to allow an appeal to the Circuit Court, and I will give the reasons it is proposed and then deal with each of the amendments in Deputy Michael McGrath's name.

We generally support the thrust of the Bill in updating the legislation. We all know from experience and records that 26% of tax appeals in 2012 and 2013 were decided in favour of the taxpayer. This means there is a need for the Appeal Commissioner. The Oireachtas Joint Committee on Finance, Public Expenditure and Reform, which considered the matter last year, was told there is sometimes up to €800 million in question where assessment has been made but collection deferred pending a resolution. I welcome the fact that, as the Minister of State said, the legislation will require the Appeal Commissioners to publish a written determination for each case within 90 days rather than just announcing a decision. It is very important and will help bring certainty to the tax system, given that people will see how decisions were arrived at. In due course, it will lead to a reduction in appeals going to the system. Practitioners who are dealing with cases can see how similar cases were decided in the past and what the outcome was, and potential appellants can use the information to decide whether they want to make an appeal. Without the written determinations, taxpayers might not know a similar case had been decided previously.

It is important the names are not published, and I agree that an element of confidentiality for the taxpayer must be maintained. We gave an example of two supermarkets on the main street of a town. If the owner of one supermarket makes an appeal and has to put every detail of his or her margins out in public at an appeals hearing, the competitor will be very interested. It would not have been right to do this. The Minister of State acknowledged that there were divergent views at the committee. My view was that taxpayers should not have to bare all to deal with their tax affairs.

I am surprised that the right to an appeal to the Circuit Court is being removed from the legislation. The essence of the amendments on which I am speaking is to reinstate the appeal to the Circuit Court which is provided for in the legislation. I am disappointed and feel it is unnecessary to remove this option. I strongly argue that the amendments be accepted. The wording of the amendments is specific regarding the Circuit Court. The only alternative provided for in the legislation is to appeal on a point of law to the High Court, and we all know how expensive it is. It does not deal with the substance, full facts or interpretation of the case, and something can be amiss. Just dealing with a point of law is a very narrow approach to allow an appeal to the High Court. While the Government will claim that a right of appeal continues to exist, it will be a very narrow, discrete right of appeal. It is only on a point of law and has nothing to do with the tax issue at hand. We are wrong to remove the option of the Circuit Court. We are possibly straying into difficulty by giving Appeal Commissioners too much power in terms of making determinations that should be a matter for the courts. I am concerned about it.

Two concerns have been expressed about the Circuit Court, including the lack of specialist judges with expert knowledge in some cases. While some judges would not have the expertise, others would. It is not beyond the wit of the Courts Service to identify Circuit Court judges who could take responsibility for hearing tax cases. Given that there are not many cases, one would not need many judges, and they would not need to be dedicated judges for this purpose but judges who happen to have a particular interest or expertise. This could have been facilitated and dealt with well. It should be taken into account today.

Another concern about the Circuit Court is the fact there are delays in it. If there is a delay, it should be dealt with. The answer is not to abolish the right of appeal to the Circuit Court. It is almost like solving the long queues for an accident and emergency service by closing the service. It is a nonsense philosophy. In society the impression is sometimes that if one gets rid of the hospital, one has solved the problem, whereas the problem has just been moved somewhere else.

We discussed the Circuit Court in the committee hearings we had before the legislation was drafted, which were very helpful. The committee was informed that in 2013, only 14 cases were appealed to the Circuit Court and in the five years from 2010 to 2014, only 46 cases were appealed to the Circuit Court. The Circuit Court option is a safety valve that has not been over-used or abused. It is important, and for the sake of the dozen cases per year, the option should remain. I do not understand why the Department of Finance and Parliament would go to so much trouble to amend legislation to remove a safety valve that allows a taxpayer to go to court and let a judge decide. Nobody is saying all the appeals will be successful. We are going to enormous trouble to remove the small safety valve that would make the legislation better. I do not understand the philosophy. There was no problem with ten or 12 cases per year going to the Circuit Court. I do not understand why we are trying to solve a problem that does not exist.

Many cases have been decided in the Circuit Court in favour of Revenue. The taxpayer will not win all the cases. It gives greater certainty for the future process if a Circuit Court decision backs up the decision of an Appeal Commissioner. It would strengthen the process and lead to more certainty and a reduction in the number of appeals. A tax adviser would be able to consider cases that had come before an Appeal Commissioner, see which decisions had been backed up by the Circuit Court, and determine whether to bring similar appeals forward. It would give greater certainty to the taxpayer, the Revenue Commissioners and tax practitioners. One of Deputy McGrath's amendments specifies that, in the case of the appeal to the Circuit Court being reinstated, hearings would be held in the circuit where the taxpayer resides rather than bringing everybody to Dublin. As it stands, people in west Cork have to travel to Dublin for their High Court hearings. It would be better if justice could be dealt with locally.

I have given the background, but it would be wrong not to discuss the individual amendments. Amendment No. 4 proposes, in page 39, after “appealed to” to insert “the Circuit Court or”. This page of the Bill states, "The Revenue Commissioners shall give effect to any determination made by the Appeal Commissioners unless the determination has been appealed to the High Court". I want to change it to "unless the determination has been appealed to the Circuit Court or the High Court". Amendment No. 6 is on a similar situation in a subsequent subsection. Again, it proposes to change the provision to "unless the determination is appealed to the Circuit Court or to the High Court". It should be included in this subsection dealing with the Revenue Commissioners giving effect to the determination.

Amendment No. 7 in the name of Deputy Michael McGrath, which would insert "or a notice of appeal to the Circuit Court was served" in page 40, line 35, moves on to the section on the publication of the results. They should be published in accordance with what is provided in the legislation, that is, where appealed to the High Court under Chapter 6, but include the Circuit Court.

Amendment No. 8 is a slightly larger amendment that inserts a new paragraph on page 41. It deals with the publication of determinations. A report on determinations should be amended by the Appeal Commissioners to state: "the result of any appeal to the Circuit Court or the High Court arising out of the determination, together with the result of any subsequent appeal from such a decision of the High Court to the Court of Appeal." There should be a clear reference in the report of a case having been taken to the Circuit Court, as there is already a reference to the High Court.

Amendment No. 9 is large and substantially on the same topic. It deletes lines 19 to 38 on page 41. This section deals with appealing against determinations. The amendment contains a few provisions that the Minister of State has seen in previous amendments. It goes without saying that each of these amendments permits the right to appeal to the Circuit Court and not just the High Court. The mechanics of how that right would be transposed into legislation are contained in amendment No. 9. The first paragraph deals with appeals to the Circuit Court and High Court and the second paragraph states: "A party may by notice in writing appeal a determination to the Circuit Court." That appeal must be lodged within 21 days. The amendment proposes to confer appeal jurisdiction on the Circuit Court in order to avoid dragging people from Donegal to Dublin. People will understand this. The next paragraph states: "An appeal to the Circuit Court shall be heard as a de novo rehearing of the appeal." That is to say, it should not be dealt with as a review, but as a new case. If an appeal of a decision is not served within a particular time, the matter can be stated to the High Court. Under the next paragraph, an appeal can be brought to the Circuit Court as well.

Paragraph (9) deals with the mechanics involved after a case has gone to the Circuit Court and is then before the High Court, as the legislation does not provide for this. Either the appellant or the Appeal Commissioners would retain the right to go to the High Court after going to the Circuit Court. The final paragraph states: "The Circuit Court’s decision in respect of an appealable matter shall be final and conclusive but this is without prejudice to the provisions of this Chapter concerning appeals to the High Court." The Circuit Court can give a determination on whether a matter that has been dealt with by it is appealable to the High Court.

Amendment No. 17 is on the section under which the Revenue Commissioners give effect to decisions of the High Court or the Court of Appeal and the Supreme Court. It goes without saying that a person can take a case to the Supreme Court, as the legislation provides for that, but we want to delete "the High Court that is appealed to the Court of Appeal under section 949AS". Some technocrat somewhere understands what this means, but we are inserting "Circuit Court". That is in amendment No. 18, which is the final one in Deputy Michael McGrath's name in this group. I ask the Minister of State to respond.

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