Joan Burton (Dublin West, Labour)
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I propose that amendment No. 58 be grouped with amendment No.1 for the purpose of enabling the Dáil to debate this important amendment. Because there is a guillotine attaching to this Bill, there will be no opportunity for the House to debate amendment No. 58. The least we are entitled to is that my proposal be facilitated.

Rory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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Deputy Burton's proposal is out of order. It is a matter for the Office of the Ceann Comhairle to make decisions on the grouping of amendments. The Chair has ruled on this matter and I ask Deputy Burton to move amendment No. 1.

Joan Burton (Dublin West, Labour)
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This Bill will be guillotined at 1.30 p.m. tomorrow, which leaves us a relatively short time——

Rory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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I ask Deputy Burton not to delay the proceedings further. The Chair has allowed her to make her point even though her motion is out of order.

Joan Burton (Dublin West, Labour)
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We are talking about an amendment which deals with tax evasion.

Rory O'Hanlon (Cavan-Monaghan, Ceann Comhairle)
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I ask the Deputy to move the amendment. Amendment No. 1 arises out of Committee Stage. Amendment No. 5 is related and the two amendments may be taken together by agreement.

Joan Burton (Dublin West, Labour)
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I move amendment No. 1:

In page 11, between lines 13 and 14, to insert the following:

1.—The Ombudsman shall include in her annual report a special report on the overpayment of tax by PAYE taxpayers, and on the take up of credits by such taxpayers, and the branch of her office dedicated to ensuring that the take up of credits is readily available to all taxpayers, and refunds made as rapidly as possible where this arises, shall be known as the Taxpayers' Advocate Office.

The purpose of this amendment is to oblige the Ombudsman to append to his or her annual report a special report on the overpayment of tax by PAYE taxpayers. The Minister for Finance, Deputy Cowen, has come into the Dáil with no prior notification of the detail of an amendment which serves basically to facilitate the tax evasion and tax avoidance industry. This represents a complete watering down of what the Minister promised at the initiation of the Bill and in the debate on Committee Stage.

Amendment No. 1 serves to represent those ordinary PAYE taxpayers who are at significant risk of receiving incorrect tax-free certificates because of the way the system functions. The Minister acknowledged in the debate on Committee Stage that in the last year for which figures were available, more than €300 million was due in refunds to PAYE taxpayers because of the absence of proper tax certification, either because of a change of business, employer or marital status, in the event of retirement, or following a transition from self-employment to employment or vice versa.

In this scenario, compliant taxpayers, which includes the bulk of PAYE workers, are entitled to be facilitated by the Government in ensuring that where they overpay tax, there is a rapid right of recourse to the Revenue Commissioners and that the money is repaid easily and quickly. It is not good enough that the Revenue Commissioners are the judge and jury in this regard. The Labour Party has advocated the introduction of a taxpayers' advocate, a person who will ensure that the ordinary taxpayer gets some justice.

We know all about the tax avoidance schemes introduced by the former Minister for Finance, Charlie McCreevy, for the very wealthy. The other side of the coin is that ordinary PAYE taxpayers are overpaying tax every year and are entitled to refunds totalling more than €300 million. There has been no attempt by the Government to ensure that an independent office such as that of the Ombudsman should append an annual report which details the work of the Revenue Commissioners in this area.

It is welcome that the Minister proposes in this Bill to extend the Revenue Commissioners' on-line services to PAYE taxpayers. However, this does not address the increasing problem of the significant numbers who are overpaying tax. The figures are small in percentage terms, representing approximately 2% of the total, but €300 million is significant in anybody's language and is important to those affected. During the Committee Stage debate, the Minister found it difficult to understand that ordinary taxpayers may not be confident in dealing with the Revenue Commissioners and instead read out a list of offices, telephone numbers and other Revenue services throughout the country.

There have been improvements in this regard but the provisions remain inadequate. There are many who do not deal properly with their tax affairs, either through fear or for some other reason. When people's circumstances change it is increasingly the case that they end up without the correct tax credits. If they are unaware of such errors, the Revenue Commissioners do not necessarily inform them of overpayments. What we advocate is a simple reform of the Office of the Ombudsman which would give her a duty of specifically reporting on this area.

I have not even dealt with the matters, raised repeatedly here, of the various tax allowances available to PAYE taxpayers such as rebates on refuse charges, medical fees and expenses and other designated expenditure. All the evidence suggests that a considerable number of PAYE taxpayers do not claim their entitlements to tax refunds on refuse charges and medical charges. Many general practitioners do not automatically give patients who pay medical fees a receipt. Many of the newer and group practices do, but to many individual doctors patient visits are considered a patient to doctor transaction and a full receipt is not made available.

What the Labour Party proposes in this amendment is therefore reasonable. The Minister would not listen to this proposal but he could listen to the tax industry, the accountants industry and, in particular, the banking industry. All those old ladies in Longford and other places who took out a single premium insurance policy which was invested overseas and was improper in terms of tax compliance, did not come up with that idea. A bank clerk, and not necessarily one in the front office of the bank, made that suggestion. Banks set up these schemes with the specific objective of facilitating tax avoidance which turned out to be tax evasion. We know this from the report on deposit interest retention tax.

As soon as the Minister had representations from various interests in banking, tax and accountancy advisory services, he significantly watered down what he told us he intended to do following the various scandals in terms of the recovery of many pots of gold. On the matter of tax evasion, the Minister's predecessor was fond of saying there was no pot of gold and that most people paid all their taxes. While most people in the PAYE sector pay their taxes, the experience of the past five years shows that there has been not one but many pots of gold to be recovered by the Revenue Commissioners when they went after people who defaulted in their tax liability through DIRT and various other schemes facilitated by tax advisers, accountants and banks. To date, no official at a senior level in the banking industry has taken responsibility. No one has taken responsibility. Probably another 10,000 people will have to deal with single premium insurance investments.

Whatever about a person coming up with the idea of opening a bank account abroad, a customer most definitely did not come up with the idea of the single premium investment policy which is to be investigated. I do not understand how the Minister can refuse to accept the Labour Party's reasonable amendment providing for a short report from the Ombudsman on PAYE taxpayers getting all the refunds to which they are entitled. At the behest of the tax advisory industry and banks, amendment No. 58 has been tabled, which significantly waters down what the chairman of the Revenue Commissioners calls for, namely, clear powers for the Revenue to prosecute the offence of aiding and abetting tax evasion and putting money overseas. The Minister has watered down provisions in that regard. He has also removed provisions from the Bill dealing with those who have indirectly facilitated the fraudulent evasion of tax by any other person. If that is not a little Fianna Fáil special for directors in banks, I do not know what it is.

Brian Cowen (Laois-Offaly, Fianna Fail)
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That is pure nonsense.

Joan Burton (Dublin West, Labour)
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On that basis, the Minister should accept amendment No. 1 from the Labour Party. It is a minor amendment but it would at least balance the scales in terms of tax justice in favour of PAYE taxpayers.

Paul McGrath (Westmeath, Fine Gael)
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My amendment No. 5 also relates to this issue. We are talking about tens of thousands of PAYE workers who have tax deducted from their income on a weekly or monthly basis and at the end of the year have paid more tax than that for which they were liable. It has been estimated that in excess of €300 million has been repaid, but a considerable number of taxpayers who have overpaid in terms of their tax contributions have not sought a refund of such overpayment.

It will be difficult to bring taxpayers' attention any more to the fact that they may have paid too much tax. Many people do not understand the tax system. That is the bottom line. They do not understand how tax credits work. I meet such people regularly in my clinic and I am sure many other Members have constituents call to their clinics with their tax documentation and P60s who do not have a clue about how their tax is computed. This is a major difficulty. I do not know how we will overcome this problem. I do not know how we will get people to realise how the system works, how their tax is computed, how they calculate whether they have paid too much tax and, if they have, how they reclaim the overpayment.

The Minister will correctly advise that documentation is included with an assessment that is issued every year by Revenue, but generally people do not understand it. They receive a page informing them of their entitlements. Many of them are not able to understand it, they do not read it properly and they do not understand how the tax system works. How will we get to a position where such overpayments can be identified? The Minister needs to identify whether the system used by Revenue shows when a repayment is due to a taxpayer and whether it ensures a repayment is made without the taxpayer having to apply for it. I understand the computer system does not operate in that way and such a programme needs to be built into the existing system to ensure that safeguard is in place to ensure that taxpayers are issued with a tax refund in respect of overpayments of tax.

The Central Statistics Office figures should also be examined. When they are compared with the figures produced by Revenue, it is clear that some people are entitled to tax refunds. I have been of the view for many years that the question of family income supplement should be tied in with the Revenue Commissioners. When the Department of Social and Family Affairs examines the amount paid out in family income supplement and compares it with income returns across various bands of workers and so on, it is generally estimated by the Department that there is only approximately a 50% uptake of family income supplement compared with the figures relating to income returns. Surely this could also be tied in with the Revenue to ensure that if a person falls within a particular income level, family income supplement could be incorporated in conjunction with tax payments. In that way people who would fall within those categories would automatically get a refund, not of tax but in the form of a payout from Revenue. Would that not make much more sense and help to improve the system by ensuring people who pay their fair share of tax are not overcharged and do not have to go to the trouble of having to apply for a tax refund? Will the Minister consider those points? There is not a magic formula for ensuring that taxpayers who have paid too much tax get a tax refund. I suppose the system as it works will have to take some kind of initiative from the taxpayer. There may be a need for an information campaign to ensure that people have an easier understanding of tax affairs, such as the amount of tax they pay and the tax credits due to them.

I would like to discuss the introduction of tax credits in recent years. I read recently that as few as 10% of people whose refuse is collected claim from the Revenue Commissioners the tax credit associated with refuse collection. I accept that the tax credit of €40 for one's refuse collection is not much, but those who do not claim it are probably those who would benefit most from it. What is the level of uptake of the tax credit of approximately €40 for trade union membership? I imagine that if one compared the number of trade union members in the country with the number of those who seek the tax credit associated with such membership, one would find that there is a major shortfall in that regard. Perhaps the Minister can give the relevant figures.

There is a significant shortfall in the number of people applying for the tax credit to which they are entitled in respect of the annual health costs they incur when they pay for prescriptions, visits to the doctor and dental treatment, which can be extraordinarily high. I recently met a person who had been paying nursing home charges for a relative without realising that such charges are tax deductible. The person in question was paying tax at the higher rate of 42%. I do not know where the fault lies. We need to do a better job of informing people of their tax entitlements in a simplified way. Such people need to be told how to go about getting refunds of tax, for example. I ask the House to support amendment No. 5.

Dan Boyle (Cork South Central, Green Party)
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The amendments before the House are the first of 61 amendments to be considered over approximately five hours. I am concerned that the House is being asked to deal on Report Stage with matters that were not discussed, or properly discussed, on Committee Stage. A similar approach was adopted during the consideration of the other two Finance Bills with which I have been involved in the House. We need to ensure that legislation is presented to the House in a different manner in the future.

Amendment No. 1 has been tabled to ensure that the Revenue Commissioners accept and react properly to problems that have already been highlighted, such as the overpayment of tax and the shortfall in the take-up of tax credits. It is unfortunate that the Minister has not taken the opportunity presented by the Bill to introduce small and simple measures to alleviate the problems caused by the overpayment of tax. I appreciate that the amount of money gained in this way is a small percentage of the overall tax take. Individual taxpayers expect that the Government will spend their taxes wisely, but there are many examples of that not being done. It is expected that everyone should pay tax according to ability to pay, so that the tax burden is not over-extended. The extent to which repayments of tax are being made within a short period of time is open to question.

We should examine the treatment of those who pay too much tax, which contrasts with the treatment of those who do not pay enough tax. I have suggested to the Minister that there should be equivalence, not only in terms of the level of interest paid on overpaid taxes, but in terms of the penalty clause that applies in such circumstances. The clause should apply to the Department of Finance and the Revenue Commissioners just as it does to those who do not pay enough tax. I would like such proposals to be taken seriously in the future.

Those who do not benefit from tax credits fall into three categories. I accept Deputy Burton's argument that the Government should play a greater role in making people aware of the credits available to them. Individual credits do not apply to a large group of people because of such people's circumstances. I am part of a smaller group of people who are aware of the existence of particular credits, such as the tax credit for refuse collection, but have chosen not to benefit from them. A significant group of people has access to tax credits but do not benefit from them for many reasons. They may not know how to apply for the credits or they may choose not to apply for them because they have a fear of the bureaucracy involved in the process. The Minister needs to take some action in this regard. Amendment No. 1 attempts to address such matters.

To what extent is the budgetary analysis conducted in respect of taxation matters of this nature based on the expectation that small numbers of people will take up the tax credits made available under the tax system? Are the budget and the Finance Bill framed in the expectation that 10% or 20% of people will take up the tax credit for refuse collection, or a small percentage of people will benefit from the tax credit for health charges? Does the Government decide to sanction certain credits on the basis of their cost to the State if everybody who is entitled to do so takes them up? If its analysis is conducted in the latter manner, the Department of Finance must be confident that the Exchequer will retain a certain amount of money in the course of the budgetary year. I ask the Minister to comment on that aspect of the matter in his response to Deputies' contributions.

Deputy Paul McGrath's suggestion is in line with Green Party policy. The availability and take-up of tax credits could be dealt with more broadly if the taxation and social welfare systems were combined in a better way. Existing tax credits could be automatic, for example, or could be refundable if that were allowed by the individual taxpayer's circumstances. The information needed to make such changes is available, for example through the personal public service number system and the returns demanded by the Revenue Commissioners and the Department of Social and Family Affairs in respect of every citizen in the State. It should not be an administrative problem to ensure that the State can make elements of tax credits refundable if they are assigned but not fully availed of. Such a system would bridge the gap between the taxation and social welfare systems. The Green Party believes the gap is contributing to the increasing social gap between those who have higher than average levels of wealth and income and those who do not. I ask the Minister to address this point.

Caoimhghín Ó Caoláin (Cavan-Monaghan, Sinn Fein)
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On Committee Stage, the Minister rejected my suggestion that the practice of the Revenue Commissioners, which involves vigorously pursuing taxpayers who are suspected of making under-payments while quietly ignoring those who have apparent and suspected over-payments, is a one-way street. He defended the steps taken by the Revenue Commissioners to inform the public of its taxation responsibilities and entitlements to tax credits. He refused to accept that the complexities of this country's tax regime are baffling for many people and that the website and printed matter vehicles employed to inform people about such matters are inaccessible or couched in prohibitive language that is simply unintelligible for many citizens.

I support amendment No. 1 in the name of Deputy Burton and amendment No. 5 in the name of Deputy Paul McGrath. If the Minister continues to oppose the amendments, all we can do is to appeal directly to the Ombudsman and the Revenue Commissioners. One would not need a degree in English studies to put together a simple missive that would be sent to all taxpayers — the database is in place — asking the simple and salient questions in a very easily understood way. For instance, I suggest that the Revenue Commissioners prepare a circular, to be sent to all taxpayers subject to the PAYE code, asking a number of questions, including whether they have a mortgage, pay for health services, including GP, dental and orthodontic care, and third level education fees, and, if so, a prompt response could save one money.

People will appreciate the simplicity of such a document, with a series of questions in response to which one could tick a box indicating whether one falls into a particular category. That is not currently the practice, as I have confirmed since Committee Stage. We all receive missives from the Revenue Commissioners and they are not couched in simple terms. The office should state that if a taxpayer falls under any given category, such as those I have mentioned, he or she may be entitled to a refund of tax paid and a reduction in his or her future tax liability. By outlining in tabulated format the range of areas that would qualify for tax credits we would assist enormously in promoting a wider, more universal understanding of the working of the tax regime.

I do not know about other Deputies, but I do not receive as many queries on this matter as I do in respect of many other matters of concern in my constituency. That reflects that people just do not know the questions to ask. I have no doubt, however, that if a missive such as the one I suggest were sent to taxpayers, people would look for assistance in assessing whether it applied to them. I have no doubt that elected representatives, at Oireachtas and local authority levels, would be very happy to assist their fellow citizens in that regard. Of course, there are those who give professional advice but unfortunately the advice of the greater number of these professionals cannot be afforded by ordinary citizens, by and large, the people of whom I speak in the course of this debate.

There is good sense in both of the amendments. Their purpose is to try to ensure the more equitable and fair taxation practice, whereby people are entitled to tax credits, reductions in their liability and, in the case of many people, rebates of tax paid over years past. The Minister has a responsibly regarding this Bill to set in train what is necessary for the Revenue Commissioners to meet their responsibilities regarding the fairness we all wish to see in the tax regime in this State.

I commend both amendments to the Minister. I hope the offices of the Ombudsman and the Revenue Commissioners will take note of the contributions of Deputies right across the Opposition benches today and previously. In the event of the Minister not accepting the amendments, he should take on board the very sane and reasonable arguments presented and adopt them in practice.

Brian Cowen (Laois-Offaly, Fianna Fail)
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I draw the attention of Deputies to the need for a versional correction to section 52(1)(b) on page 96 of the Finance Bill, as amended in select committee. The word "allowed" was omitted inadvertently and should be inserted at the beginning of line 14. I ask the Ceann Comhairle to direct the Clerk to make the correction, as provided under Standing Order 134.

Let us now consider the amendments. As has been said, we had a long debate and discussed in some detail the matter of how the Revenue Commissioners do their best to ensure people are aware of their entitlements. They have been very proactive in this area, using every mechanism and technology at its disposal, including post, text messaging, free lines, telephone lines and forms. It has exploited the possibility of downloading forms from websites. It has used every possible means by which reasonable inquiries can be made by taxpayers into their entitlements. The Revenue Commissioners obviously have a vested interest in ensuring people have all the information required because this obviously allows for correct returns and ensures that all accounts are in order. The Revenue is doing all it is being asked to do, in every possible way.

Amendments Nos. 1 and 5, which are being considered together, deal with unclaimed PAYE overpayments. As I stated, we had a comprehensive debate on Deputy Burton's amendment on this topic last week. I did not accept her suggested use of the Ombudsman's office in the manner proposed in the amendment and I rejected any suggestion that the Revenue Commissioners had a vested interest in ensuring that taxpayers are not fully informed of their entitlements.

While I do not want to repeat all I said on Committee Stage, it is important that I re-emphasise a few points on the subject of overpayments by PAYE taxpayers. The Revenue Commissioners do all in their power, through various means, to ensure taxpayers are informed regularly of their entitlements and given, on request, all appropriate advice on their tax affairs. Revenue's customers can expect to be given the necessary information and all reasonable assistance to enable them to claim their entitlements. This is Revenue's commitment and it takes it very seriously.

There is no policy of deliberately over-collecting tax. Revenue administers the law fairly, reasonably and consistently and seeks to collect no more than the correct amount of tax. To pay the correct amount of tax under the PAYE system or to receive repayments due, the taxpayer must inform the office of his or her full entitlements. The PAYE system requires this information if it is to operate as intended.

There is no crock of gold in unclaimed repayments due to taxpayers, as suggested in some quarters. In respect of the 2003 tax year, 287,258 PAYE taxpayers, amounting to 17% of the total PAYE taxpayer base of 1.6 million, have so far made claims or requested reviews of their tax position. Of these reviews, 8% identified underpayments, 17% resulted in no change and 75% resulted in repayments being made. No repayment was due to one in four of those who requested reviews and one third of those to whom no repayment was due had underpaid. A sum of €185 million has been paid and this figure could eventually rise to approximately €306 million based on estimates and experience. These figures should be considered in the context of a total PAYE revenue bill of €7.2 billion in that year. Repayments of tax for 2003 that have yet to be made, and will be made as soon as claims are received from the taxpayers concerned, amount to less than 2% of PAYE receipts for the year.

The bottom line is that where a taxpayer has overpaid tax for a given year through the PAYE system, he or she is in the best position to know this. In many instances, the taxpayer will be the only person who knows that tax has been overpaid. It is simply incorrect to suggest, despite all the evidence, that the Revenue Commissioners are not doing enough to inform taxpayers of their entitlements and creating another layer of bureaucracy which will divert resources in the Ombudsman's office and will not alert taxpayers to their entitlements or hasten their claims to repayment. As in the public sector generally, the Ombudsman's remit covers the Office of the Revenue Commissioners.

On Deputy Paul McGrath's amendment, I understand that the view of the Central Statistics Office is that the data collected by that organisation on household incomes and expenditure patterns are not sufficiently comprehensive or detailed to identify potential overpayments. Moreover, many of the data are only collected at five-yearly intervals and on a sample basis.