Simon Harris (Wicklow, Fine Gael) | Oireachtas source

I thank the Deputies. I partook in this discussion on Committee Stage with their respective party spokespersons. I accept that we have different views on the matter, so I will outline our rationale for proposing this.

The current appeals process allows for an appeal by a taxpayer against a determination of the Appeal Commissioners to a judge of the Circuit Court. This Circuit Court stage is a complete rehearing of the appeal and the proceedings do not take any account of what may have transpired at the Appeal Commissioners stage. It is the determination of the Circuit Court judge that prevails. A complete rehearing can only be justified if there are reasons to suppose there were poor decisions on matters of fact or a particular problem with the Appeal Commissioners. No Deputy is suggesting that this is the case.

Prior to taking a matter to the Appeal Commissioners, all taxpayers who have a dispute with Revenue have the option of seeking a review of its decision. This would be done by a Revenue officer who was not involved in the decision or by an independent external person who had appropriate expertise.

As I did on Committee Stage, I strongly refute the assertion made by Deputy Pearse Doherty on Second Stage that there was a policy pattern of the Government trying to remove the right of access to the Circuit Court for citizens and that the intention behind the proposal was to prohibit people from appealing. Rather, the Minister is not persuaded of the necessity of having an appeal to the Circuit Court and considers that the disadvantages significantly outweigh the advantages. This Bill is about ensuring that we have a modern and expeditious, but fair, process in place. The reforms contained in the Bill will ensure a more robust, transparent and streamlined procedure under which a route of appeal to the Circuit Court is not required and is not one over which the Minister can stand. The Appeal Commissioners are specialist expert tax tribunals and the Minister is determined that this status be acknowledged and, where possible, strengthened by the Bill. Under the new appeals regime, the Public Appointments Service, PAS, selects candidates for appointment as Appeal Commissioners based on the specific requirements of the job and looks for appropriate tax and legal experience and qualifications. This is not a reflection on the expertise and skills of current and former Appeals Commissioners, merely a statement of the strengthened provisions to ensure that appellants continue to get high levels of professional service. A Circuit Court judge may encounter a tax case only infrequently. It may seem rather peculiar to establish an expert tribunal only to allow an appeal by way of a full rehearing at a forum that does not have and, in fairness to the Circuit Court, does not profess to have the same expertise in tax matters.

The Bill contains provisions that will underpin this specialist expertise with fair and impartial appeal proceedings and a clear independence from Revenue. The reform is intended to produce a better resourced, more efficient and transparent Appeal Commissioners stage. It will see more flexible and active case management by Appeal Commissioners, publication of written determinations and a streamlining of the case stated procedures, which I discussed with Deputy Lowry, for appeals to the High Court. In contrast, the modus operandiof Circuit Court rehearings appears anomalous and the continuation of the Circuit Court stage of the appeals process has the potential to undermine much of the proposed reform.

Our tax appeals system has remained largely unchanged since 1853.

Rather than taking the view that it has stood the test of time, we should accept that it requires a significant and long-overdue overhaul. At that time, a taxpayer could appeal a decision to the special commissioners - the predecessors of the Appeals Commissioners - and to the county court judge. However, these special commissioners did not have the same the independence from the Revenue Commissioners as the current Appeal Commissioners. It was reasonable, in the circumstances which obtained in 1853, to provide for an independent avenue of appeal for taxpayers.

Furthermore, the current tax appeals process is out of step with the procedures of other expert appellate tribunals. For example, some decisions made by public bodies can only be appealed by way of an appeal to the High Court on a point of law. This is an issue I presume Deputies Sean Fleming and Michael McGrath agreed with when they were on this side of the House. Examples of the bodies to which I refer are An Bord Pleanála, the Financial Services Ombudsman, the Information Commissioner, the Irish Financial Services Appeals Tribunal, the Labour Court, the Refugee Appeals Tribunal, the Rent Tribunal, the Social Welfare Appeals Office, the tenancies tribunal of the Private Residential Tenancies Board and the Valuation Tribunal in respect of commercial rates. Unfair dismissal cases were appealable from the Employment Appeals Tribunal to the Circuit Court but this has now ceased following the recent establishment of the Workplace Relations Commission. Deputy Tóibín asked a very valid question as to why this is the case. Why is it that successive Governments have put in place expert tribunals to try to develop an expertise and specialisation to ensure citizens and, in this case, taxpayers have the right to access that expertise and have their situation reviewed by experts? I refer the House to the Supreme Court judgment in the 1997 case of Henry Denny & Sons (Ireland) Ltd v. Minister for Social Welfare, which is particularly relevant. In that case, the Supreme Court Justice said:

I believe it would be desirable to take this opportunity of expressing the view that the courts should be slow to interfere with the decisions of expert administrative tribunals. Where conclusions are based upon an identifiable error of law or an unsustainable finding of fact by a tribunal such conclusions must be corrected. Otherwise it should be recognised that tribunals which have been given statutory tasks to perform and exercise their functions, as is now usually the case, with a high degree of expertise and provide coherent and balanced judgments on the evidence and arguments heard by them it should not be necessary for the courts to review their decisions by way of appeal or judicial review.

That is why, as Governments have done in the past, this Government is putting in place those expert tribunals to hear such appeals.

The other issue to which reference has been made is cost. I accept that going to the High Court is costly. I am not sure it is as costly as some of the figures that have been put on the record of the House during the debate on this Bill. It must be remembered that even if the Circuit Court stage was retained, it would clearly remain open to Revenue to appeal the Circuit Court determination against it so taxpayers might find themselves before the High Court in any event. The suggestion, therefore, that by removing the Circuit Court we are putting all these High Court costs on people does not stand up to scrutiny. At present, even with the Circuit Court stage, it is open to Revenue to appeal to the High Court.

It appears that a series of the proposed amendments, particularly those tabled by Deputy Tóibín, are intended to completely replace the current High Court stage of the appeal process with an appeal to the Circuit Court. While, at face value, such a move might appear to have merit - as it might prove to be a less costly avenue of appeal - I contend that it would give rise to serious disadvantages. Many tax appeals involve substantial potential tax liabilities and very complex, technical tax issues. They may also involve the determination of matters, the outcome of which might go beyond the immediate appellant and be of relevance to a wide body of taxpayers. High Court judgments clearly carry much more authority than those of the Circuit Court and can have significant value in terms of setting precedent in determining how our tax system is to be administered. The need for certainty on the administration of our tax system is paramount and the High Court plays a crucial role in providing this certainty in terms of points of law. Such a restricted avenue of appeal would have the effect of seriously compounding the problems associated with a deficit of specialist expertise that I have already outlined. Furthermore, many appeals currently bypass the Circuit Court and it is likely that problems being experienced with the capacity of some Circuit Courts to process tax appeals would be even more pronounced were it to be the only appellate forum after the Appeals Commissioners, although I accept the point made by Deputy Fleming in this regard.

This Bill is an honest attempt to provide for an efficient expert tribunal to address disputes that arise between taxpayers and the Revenue Commissioners. I believe it achieves that. There will be a more robust structure in place after the passage of this Bill. Retaining the Circuit Court stage in a reformed, streamlined and better-resourced process is not a position over which the Minister can stand. The appeals process is one of a range of avenues of redress open to taxpayers who feel aggrieved either by decisions made by Revenue officials or by the behaviour of such officials. Taxpayers also have access to Revenue's internal and external review processes as well as avenues such as judicial review and to the courts, up to an including the European Court of Justice in relevant cases. By providing for the recruitment and selection of suitable experts and for streamlined procedures for the making and hearing of appeals, the Bill aims to ensure an efficient, cost-effective use of public resources and of the costs incurred by a taxpayer in bringing an appeal. The proposal to allow rehearings before the Circuit Court runs contrary to this objective and ignores the fact that the expertise lies within the Appeals Commissioners in this area. Retaining the Circuit Court stage of the appeals system has the potential to unnecessarily and inadvertently undermine the reforms being introduced. For those reasons, I am not in a position to accept these amendments.

See this speech in context