Eoghan Murphy (Dublin Bay South, Fine Gael) | Oireachtas source

I very much appreciate the concerns of the Deputies on this issue but I must underline again the independence of the Revenue Commissioners. The Department of Finance does not deal with the individual tax affairs of citizens. I suggest that the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach takes up Deputy Brassil's suggestion and examines this issue so it can be explained properly and fully by the Revenue Commissioners. There has been no change in policy and no one is operating on the assumption that someone may not be tax compliant.

In so far as the letters issued are concerned, the wording is standard wording used by the Revenue Commissioners for all forms of aspect queries. If the shares were not mentioned during the course of an audit, they may not have been considered by the auditor. It is not necessary to pay the liability within 21 days; it is necessary for farmers to assess their situation and make contact with the Revenue Commissioners.

Capital gains tax would have applied on the uplift in value of the shares. The case raised relates to the original market value received, that is, the base cost that could have been deductible for capital gains tax purposes. This is a matter for the Revenue Commissioners but, in general, where a taxpayer co-operates with the Revenue Commissioners and makes a voluntary disclosure, publication does not apply. This is an issue faced by employees also. In many cases, they choose to sell a proportion of shares in order to pay the tax due and hold the balance. With regard to how the Revenue Commissioners might collect any tax due, they offer a wide range of payment and phased-payment options that would allow affected farmers to meet their income tax obligations in a manner that best suits their individual circumstances. Affected farmers are advised to engage with the Revenue Commissioners early to address the issues raised. The 21-day period mentioned in the letter is about making contact with the Revenue Commissioners. There is not a demand for payment within 21 days, even on the assumption that there is a liability. The letter makes reference to where there may be a concern or something to be declared. In cases where a full disclosure was made in a tax return, it is unlikely that any taxation or additional taxation is due.

On why the shares are being treated as taxable income, they are patronage shares issued by a co-operative to members arising from the trading relationship between the member and co-operative. In effect, the greater the business links between the milk supplier and the co-operative, the greater the benefit and, therefore, the profit received by the supplier by way of a number of patronage shares issued by the co-operative.

I am aware this is an issue of concern and that there are details to be considered. I have more detailed notes that I would be happy to share with the Deputies so that they might understand the approach from the Revenue Commissioners in so far as the Department of Finance is concerned. However, this is a matter for the Revenue Commissioners in so far as its operations are concerned in this area of patronage shares and the letters that have recently been issued to the farmers concerned.

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