Richard Bruton (Dublin North Central, Fine Gael)
Link to this: Individually | In context

Question 271: To ask the Minister for Finance the extent of the practice of discretionary waivers at the Revenue Commissioners in respect of interest in the 1980s; if the practice was widespread; the number of cases that received such waivers; if he can state who in the Revenue Commissioners had the authority to allow such waivers; and if he will make a statement on the matter. [24148/05]

Brian Cowen (Laois-Offaly, Fianna Fail)
Link to this: Individually | In context

Levying of interest charges is a matter for the Revenue Commissioners and the application or waiving of an interest charge in any instance is dealt with by Revenue under its powers of care and management. The exercise of these powers is carried on by and under the authority of the commissioners. I am informed by Revenue that payment of interest is considerably more problematic than payment of tax. Even in the present climate, where meeting tax obligations is increasingly seen as the correct thing to do, payment of interest is still strongly resisted with many taxpayers putting forward arguments for mitigation of the interest charge.

It is clear that in the 1980s tax collection was radically different from what it is today. There was a significant and widespread problem of non-payment of tax at the time. Revenue's computer systems automatically calculated and issued an interest demand in respect of every late payment. However, this was entirely a process driven programme with no direct personal contact with the taxpayer and no differentiation between cases with genuine difficulties and those who were deliberately delaying payment.

The bulk of the collection effort had to be directed towards the recovery of the tax itself. I have been advised by Revenue that it was not in a position to follow through on the interest charges and inevitably, the approach to interest was unsuccessful. In the circumstances, I am advised by Revenue that "discretionary waivers" in regard to interest did not generally arise. The reality was that, while interest charges were raised, widespread non-payment was the de facto situation with taxpayers systematically taking advantage of the fact that Revenue was not in a position to pursue payment. In the relatively limited number of cases where a taxpayer would have responded to the interest demand from Revenue by way of a request for waiver, such a request would have been considered on its merits and would in the normal course have been decided by the relevant officials in the Collector-General's office handling the case.

Revenue policy and practice today in relation to interest collection are clear and very effective. This is borne out by the fact that in 2004 debt was a mere 2.4% of collection for that year compared to 68% in 1988. This has been achieved through a combination of measures, including vastly improved collection performance and write-off of uncollectible debt.