Mark Daly (Fianna Fail)
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I thank the Minister of State for taking this issue. I have received some correspondence from constituents, employers and accountants who are concerned that this will be unmanageable and will have an adverse effect on accountants' offices. They have raised a number of practical issues with me, but I would like to listen to the rationale by the Department of Finance for this approach.

Jan O'Sullivan (Limerick City, Labour)
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The Minister for Finance is well aware of the concerns raised by Senator Daly. It will probably not come as a surprise to the Senator to hear that similar concerns have been raised directly with the Minister by a wide variety of organisations and individuals. I want to be clear, in that the Minister takes these concerns seriously.

Perhaps it would be worthwhile my explaining the background to the proposed changes to income tax pay and file dates, as these are just one aspect of a much wider development. Under the regulations known as the two-pack, which were formally adopted on 30 May 2013, a common budgetary timeline is being introduced for all euro area member states. Specifically, the draft budget for central government and the main parameters of the draft budgets for all of the other sub-sectors of the general government must be published by 15 October each year, draft budgetary plans in a common format must be submitted by all euro area member states not in a programme of assistance, and the budget for the central government must be adopted or fixed upon and published by 31 December each year.

In light of these requirements, the Government decided to bring budget day forward from the first week in December to on or before 15 October from now on. Accordingly, the Minister for Finance presented budget 2014 on Tuesday, 15 October. The Government also decided that the Finance Bill should complete its passage through the Oireachtas by 31 December each year.

One of the most critical elements of the budgetary process is the accuracy of systems for forecasting potential revenue yield in the year in question prior to the budget actually taking place. This is why pay and file dates have become important. In the context of a December budget day, the availability prior to the budget of information on cumulative tax yields to the end of November gave a high degree of certainty to the estimation of potential outturn for the year. For example, cumulative tax yield to the end of November 2012 was €33.8 billion, which represented 92% of the full year outturn of €36.6 billion. On the other hand, the cumulative yield to the end of September, at €26.1 billion, represented only 71.3% of the eventual outturn.

The scope for unanticipated events that would lead to either a higher or lower than projected outturn is considerably increased in the context of an October budget. Such occurrences could result in the highly undesirable need for countervailing measures to bring the budget back on track within a period of only a month or two of having been introduced in October, the new date resulting from the adoption of the two-pack. In addition, the ability to project future yield is compromised. Consequently, measures that would result in improvements in the availability of information or increases in the proportion of total yield already available prior to the budget must be considered.

It is clear that the main areas where scope exists to introduce such improvements relate to the income tax pay and file arrangements. However, it is critical that any change made here be implemented in a manner that will not cause problems for the State, industry or practitioners. Therefore, on 11 October the Minister initiated a consultation process on a revision of the existing arrangements. This process remains open until close of business tomorrow, Friday, 8 November, but I am sure that there could be some flexibility in respect of late submissions. I encourage all those who hold views on the proposed changes to engage with the Department via this process. Full details are available on the tax policy website, www.taxpolicy.gov.ie.

Mark Daly (Fianna Fail)
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I will summarise - Europe is at fault. That is about the size of it.

Jan O'Sullivan (Limerick City, Labour)
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We are a part of Europe.

Mark Daly (Fianna Fail)
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Not for one second do I attribute any blame to the Minister of State, but the answer is basically that Europe is at fault. I do not know whether we did anything about it at European level. Did we engage and explain that how this change was designed would cause us problems or did we just take the new budgetary timeline that we were given? To summarise the reply, it is Europe's fault and do not blame the Department. I thank the Minister of State.

Jan O'Sullivan (Limerick City, Labour)
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I will respond briefly. We are a part of Europe and any decision made therein. The Minister has stated that he takes these concerns seriously. The consultation process is still open for another day or two. I do not doubt that concerns will be considered, but I have outlined the reasons, the timescales and the need for as much accuracy as possible when making budgetary decisions.

Mark Daly (Fianna Fail)
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I thank the Minister of State. I know that there is a consultation process but, given our discussion on EU legislation this morning, my point is that we always engage in the European legislative process late. It is now a fait accompli and a consultation process will make no difference to Europe's timelines. What level of engagement was there from the Department in highlighting our concerns with, for example, practitioners to make them aware of the possibility of a change to the filing deadlines? This should have been done years ago, but we are at the tail-end of the process.

Jan O'Sullivan (Limerick City, Labour)
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We have known about the two-pack for quite some time.

Mark Daly (Fianna Fail)
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Yes, but practitioners are now being asked for their opinions. It is a bit late in the day.