Richard Bruton (Dublin North Central, Fine Gael)
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Question 367: To ask the Minister for Finance the value of interest payments made by the Revenue Commissioners in respect of overpayments of tax, and the rate of interest applying; and his views on whether the legislation is too restrictive in respect of the circumstances when compliant taxpayers are due interest rebates. [3204/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am advised by the Revenue Commissioners that the value of interest payments made by them in respect of repayments of tax for each of the three years 2003, 2004 and 2005 is as follows:

The 2003 figures are not comparable with subsequent years because of changes which came into effect in that year. Furthermore, exceptional repayments which arise, for example, in cases which proceed through all stages of the appeal process and take many years to finally determine cannot be isolated in the above figures and make year on year comparisons inappropriate.

The rate of interest applicable since 31 October 2003 is 0.011% per day — approximately 4% per annum. The rate in the period 1 September 2002 to 31 October 2003 was 0.0161% per day- approximately 6% per annum. The interest is tax-free.

On the general question of whether the legislation is too restrictive, my predecessor as Minister for Finance, Mr. Charlie McCreevy, examined the whole question of taxpayers' entitlement to repayment of tax and interest on tax repayments in the context of Finance Bill 2003 with a view to introducing, in so far as practicable, a uniform scheme which was fair and reasonable for taxpayers, and which also took into account the position of the Exchequer. On foot of that review, a new scheme was introduced in Finance Act 2003 which gives taxpayers a general right to repayment of tax overpaid subject to a four year time limit on claims. Depending on the circumstances giving rise to the repayment, interest is calculated from the end of the tax period to which the claim relates or six months from the date on which a valid claim to the repayment is made. A corollary to the restriction to four years on the taxpayer's right to a repayment was a reduction to four years in the Revenue Commissioners right to assess taxpayers, except where fraud or neglect is involved, where no limit applies.

I am satisfied that the current provision is fair and appropriate and I have no plans to amend the legislation accordingly.