Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

This issue was raised previously by Senator Higgins, including last year. There is a special section within the Revenue Commissioners, known as the large cases - high wealth individuals division, deals with high wealth individuals. It is important the public knows that these individuals are not treated in the same way as any other taxpayers. There is a special section in Revenue which compiles information on individuals. This is done through its knowledge of and co-operation under double-taxation agreements with Revenue authorities in other countries. Revenue has a detailed list of everybody in the high wealth category. These are high wealth individuals with assets in excess of €20 million. The previous threshold was €50 million. The Revenue previously dealt with this issue on the basis of assets worth in excess of €50 million. I will make a couple of points in that regard.

There are people in Ireland who have high wealth assets, but little or no income. They may have an investment here or a large family legacy located here but wealth does not always equate to income. It is important to make that point. Normally, there should be a connection between both, but not always specifically. The Revenue's medium enterprise division also has a unit dealing with high wealth individuals and this remit covers individuals whose assets are between €10 million and €20 million. The review which led to the reduction in the high wealth individual threshold from €50 million to €20 million was conducted in 2019 and the report was published in June 2019. Senators should bear in mind that following on from Revenue's review and report produced last year, we have very new information in respect of this area and this led to the threshold being reduced from €50 million to €20 million. I understand that the rationale behind using the threshold of €20 million included facilitating the close alignment of Revenue's resources in the context of risk. Revenue has a serious risk unit which looks at circumstances where revenue to the State could be at risk. The threshold was €50 million and it has been reduced to €20 million. Revenue is of the view that, in terms of risk, this is an appropriate level. The reduction from €50 million to €20 million is a big one.

A further rationale was the engagement between Revenue and the Comptroller and Auditor General on chapter 18 of the 2018 report on the management of high wealth individuals’ tax liabilities and - I have a particular interest in the next line of my script - discussions during the attendance of the Chairman of the Revenue Commissioners at the Committee of Public Accounts in November 2018. In the previous Oireachtas, I was Chairman of the Committee of Public Accounts. The 2018 report of the Comptroller and Auditor General included material on high wealth individuals, which is an issue I took particular interest in, as Senators are doing today. The Committee of Public Accounts took the view that the €50 million threshold was too high. I think everyone would agree with that. I drafted and published a report on behalf of the committee recommending that it be reduced. In terms of accountability and transparency in the Oireachtas, the committee's input into that arising from its detailed examination of the chapter in the Comptroller and Auditor General's report, its discussions on it with Revenue and the report it produced, did contribute to the threshold being lowered. That is an important point to make. I acknowledge the work of the Members of the Oireachtas who contributed to that report. As an issue, this has been live. As I said, Revenue reviewed it and subsequently published a report on it last year.

The adjustment of Revenue’s organisational structure is an ongoing process, influenced by a wide range of factors, both external and internal. Revenue proactively and continually evolves its structure to ensure that it optimises the alignment of its resources with risk to the taxpayer by not collecting all the money that is due and to ensure taxpayer compliance. Revenue is independent in its administration of the tax and duty systems and the threshold within which cases are managed by the different divisions in Revenue is an operational matter for Revenue. As part of its ongoing management of its case base, I understand Revenue continues to prepare reports and evolve that base. The management of issues in regard to the collection of taxes is a matter for the Revenue, which, at operational level, has reduced the threshold from €50 million to €20 million. It continues to examine the risk and should a future risk be identified Revenue will prepare a report on it. As I said, it published one such report last year. In these circumstances, a further review is not appropriate at this time. It would not be a productive use of Revenue resources coming so soon after the previous review. On that basis, I do not propose to accept the amendment.

There are ongoing major improvements in this area. The threshold has been reduced from €50 million to €20 and Revenue will keep the matter under review. As I said, it produced a report. Revenue staff are the best people at the coalface to assess the risk and they are doing that and they will continue to issue further reports. I have no doubt the issue will come up again, not just here in a future debate but also, perhaps, at hearings of Oireachtas committees, be that the Joint Committee on Finance, Public Expenditure and Reform, and Taoiseach or the Committee of Public Accounts.

There are good mechanisms in place and there has been substantial progress on this issue in the past two years. I think we should accept that and leave it to Revenue to come forward with further reviews. I look forward to that. I cannot accept the amendment.