Damien English (Meath, Fine Gael)
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Question 107: To ask the Minister for Finance the level of repayments to taxpayers in each of the past three years and to date in 2005; and if he will make a statement on the matter. [33125/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am informed by the Revenue Commissioners that the number of reviews of tax liability sought by PAYE taxpayers in the past three years which resulted in refunds are as follows: as of 23 September 2005, there were 322,361 such reviews and the amount refunded was €282 million; in 2004, there were 350,016 reviews and refunds of €278 million; in 2003, there were 314,298 reviews and refunds of €265 million; and in 2002, there were 304,272 such reviews. The amount refunded in 2002 is not immediately to hand but I will revert to the Deputy with the information as soon as possible.

PAYE is a tax collection system which was designed to collect an employee's tax liability for a year on a cumulative basis over the year. The correct amount of tax can only be collected where the employee has claimed and been granted in the annual notice of tax credits and standard rate cut-off points all the reliefs to which he or she is entitled. Revenue can only allow tax credits or reliefs on the basis of the information that is known to them. If the information on the tax credit certificate is incorrect or incomplete because of inadequate information received from the taxpayer or if there is a change in circumstances in the course of the tax year which is not notified to Revenue, the system will not operate as intended and the tax deducted will be incorrect.

The vast majority of taxpayers are conscious of the credits and reliefs they are entitled to and, where claims are necessary, take the required action. Revenue makes every effort possible to inform taxpayers of their entitlements and, where additional tax credits are claimed, the necessary adjustments in the taxpayer's affairs are speedily made.

Some reliefs need not be claimed as they are given at source, for example, pension contributions, permanent health insurance, medical insurance and mortgage interest. Others need only be claimed once as they will remain constant in the taxpayer's profile over the year, for example, basic tax credits, PAYE credit and trade union subscriptions. In this instance, once claimed, the reliefs are automatically carried forward from year to year. The only reliefs that need to be claimed on an ongoing basis are those that are expenditure related, such as medical expenses relief. Such claims give rise to the greater part of repayments of tax since the relief cannot be quantified until after the end of the year.

Revenue is already very proactive in the manner in which it ensures that PAYE taxpayers are made aware of their entitlements and facilitated in claiming these. Revenue keeps this issue under constant review and takes whatever steps are necessary with regard to public information campaigns to continue to inform taxpayers of their entitlements and to simplify, as far as possible, the arrangements for making these claims. The upcoming bulk issue of more than €2.2 million in tax credit certificates for 2006 will be the focus of an information campaign, as will the roll-out of the PAYE on-line system in early 2006. I emphasise, however, that the primary responsibility for ensuring that Revenue has the most up-to-date information on a taxpayer's affairs lies with the taxpayer.

Richard Bruton (Dublin North Central, Fine Gael)
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I thank the Minister for his reply. His figures suggest that one in five people obtain a tax review and, on average, receive a €750 refund. While I do not suggest that the remaining four out of every five would receive a similar refund, has the Minister looked hard at the take-up on various reliefs where there is likely to be under-claiming?

I have conducted a calculation exercise, without the resources available to the Minister, on the back of an envelope, so to speak. I estimate that on DIRT, approximately 5% of the refund is taken up, that is, only 5% of those eligible for a refund obtain one. These are mostly elderly people with deposit accounts. On bin charges, according to figures from the Department of Finance, approximately 15% of the relief is taken up. On medical expenses, using Central Statistics Office data on how much people spend on medical care, the take-up is approximately 20%. On rent, the take-up is around 40%. The take-up of relief rises for home carers, where the figure is approximately 75%. In this context, at least €350 million per annum of taxpayers' money is not getting back to them.

I accept that the Revenue Commissioners produce information leaflets but will the Minister charge Revenue with completing a statistical exercise to estimate how much tax relief is being taken up and how much is not? Let us obtain some hard data in this area. I believe the figures I have come up with are not very far wide of the mark and if that is the case, then over a four-year period where a look-back is possible, we are talking about €1.2 billion to €1.5 billion of taxpayers' money that is not being returned to them.

Everyone wants to see a fair tax code where people who are well off pay their way. The other side of that coin is that we want to see those who deserve it getting their money back. Will the Minister take more of an interest in returning this money to taxpayers instead of simply reciting the fact that the Revenue Commissioners do certain things and the obligation is on the taxpayer? Let us do something to return the money to where it belongs.

Brian Cowen (Laois-Offaly, Fianna Fail)
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I cannot comment on the Deputy's specific points. If he forwards his data to me, I can give him a considered reply. This is an issue that is ongoing and I accept the Deputy's general argument. I can consider his suggestion when he forwards his information which I will ask Revenue to examine.

Joan Burton (Dublin West, Labour)
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What is the current situation in the Department and the Revenue Commissioners with regard to refunds for taxpayers in the building industry? The Comptroller and Auditor General made a detailed comment on this matter. It has also been the subject of a number of reports of ongoing fraud cases, including one involving 294 contractors and another involving 22 taxpayers in the building industry. The Comptroller and Auditor General has indicated that this is a significant area of fraud. What has the Minister done to address this issue?

Brian Cowen (Laois-Offaly, Fianna Fail)
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The Revenue Commissioners are following up these matters and I can get a detailed response from them as to what they are doing to try to deal with the query raised by the Comptroller and Auditor General.

Joan Burton (Dublin West, Labour)
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Is it true that the refunds have been suspended?

Brian Cowen (Laois-Offaly, Fianna Fail)
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I cannot confirm or deny that at present.

Richard Bruton (Dublin North Central, Fine Gael)
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I have assembled the information to which I referred earlier and can forward it to the Minister. What I have calculated is based on CSO estimates of how much is spent on out-of-pocket medical expenses and on what we know of bin charges through the local authorities. It is also based on what we know of the number of people who claim DIRT refunds. Only 1,000 people claimed DIRT refunds while there are 36,000 people on the small income exemption limit. Clearly, there is under-claiming. I do not have a monopoly in this area. I can forward my data to the Minister, but they are back-of-an-envelope in nature.

Brian Cowen (Laois-Offaly, Fianna Fail)
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I understand that.

Richard Bruton (Dublin North Central, Fine Gael)
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I ask the Minister to undertake a study, to ask Revenue to look hard at this issue and come back with some hard data. I will send my guesswork to the Minister.

Brian Cowen (Laois-Offaly, Fianna Fail)
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I take the Deputy's point on board. I will have the issue checked out in more detail.