Tom Parlon (Laois-Offaly, Progressive Democrats)

There is no policy of deliberately over-collecting tax. Revenue administers the law fairly and reasonably and consistently seeks to collect no more than the correct amount of tax. There is no crock of gold in unclaimed repayments for PAYE taxpayers as has been suggested in some quarters. For the 2003 tax year, 287, 258 PAYE taxpayers, which represents 17% of the total PAYE taxpayer base of 1.6 million, have so far made claims or requested reviews of their tax position. Of those reviews, 8% were underpayments, 17% resulted in no change and 75% resulted in repayments being made. No repayment was due to one in four of those requesting reviews and one third of those to whom no repayment was due had, in fact, underpaid.

Some €185 million has already been repaid and this figure could eventually rise to approximately €306 million. These figures should be considered in the context of the total 2003 PAYE revenue of €7.2 billion. Repayments of 2003 tax, which have yet to be made but which will be made as soon as claims are received from the taxpayers concerned, amount to less than 2% of PAYE receipts. Where a taxpayer has overpaid tax for a year under PAYE, he or she is in the best position to know. Indeed, in many instances the taxpayer would be the only person that would know there has been an overpayment.

This Bill includes provisions which allow for an extension of on-line Revenue services to PAYE taxpayers in the latter part of this year. PAYE taxpayers will be offered an on-line facility to electronically file their returns and claim repayments, as well as a range of other self-service options with regard to the management of their tax affairs. This will significantly improve the level of service to the PAYE customer and will speed up the identification and payment of claims where any overpayments have occurred.

Senator Ryan referred to the donation scheme and how it operates. The arrangements for allowing tax relief on donations depend on whether the donor is a PAYE taxpayer, an individual on self-assessment or a company. For a PAYE taxpayer, the relief is given on a grossed-up basis to the approved body rather than by way of a separate claim for tax relief by the donor. For example, if an individual who pays income tax at the higher rate of 42% gives a donation of €580 to an approved body, the body will be deemed to have received €1,000 less tax of €420. The approved body, namely, the charity, will, therefore, be able to claim a refund of €420 from Revenue at the end of the tax year. Similarly, if a taxpayer on the standard rate makes a donation of €800 to an approved body, the body will be able to claim a refund of €200 from Revenue at the end of the year.

In the case of a donation made by an individual who pays on a self-assessment basis, the individual claims the relief and there is no grossing-up arrangement. Companies claim deductions for donations as if they were a trading expense. The system, as it applies to the self-assessed taxpayer, is designed to ensure that the incentive to make donations to worthy causes is maximised. The availability of the relief as a deduction serves to increase the amount that such payers can donate. If a self-assessed taxpayer donates €1,000, the value of relief to him or her is €420 if he or she is paying tax at the top rate, and €200 if he or she pays at the standard rate. The donation scheme is extremely generous in that the relief is granted at the taxpayer's marginal rate of tax and there is no upper limit on what can be donated.

I hope I have covered all points raised during this debate, which has been conducted in the best traditions of this House. Senators can rest assured that their comments have been noted and points raised can be pursued further on Committee Stage. I thank all Senators for their contributions.

Senator Leyden raised a few points and I would be delighted to go to Roscommon to open the fabulous new decentralised offices there. The next decentralisation report is a matter for the committee. I note the Senator's comments about the chairman who has moved on. That is not slowing up in any way delivery on decentralisation. I look forward to making some positive announcements on that issue in the near future.