Joan Burton (Dublin West, Labour)
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Question 270: To ask the Minister for Finance the estimated value of tax refunds due to individual taxpayers but not claimed for each year from 1998 to date in 2006; and if he will make a statement on the matter. [8964/06]

Brian Cowen (Laois-Offaly, Fianna Fail)
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I am informed by the Revenue Commissioners that for reasons to do with the structure and operation of the tax assessment and collection system, it is not possible to estimate the value of tax refunds which have not been claimed by individual taxpayers.

For PAYE taxpayers, the tax collection system is designed to collect an employee's tax liability for a year on a cumulative basis over the year. It can only collect the correct amount of tax where the employee has claimed and been granted all the reliefs to which he or she is entitled. Revenue can only allow tax credits and reliefs on the basis of the information that is known to them. If there is a change in circumstances which has not been notified to Revenue, the information on the tax credit certificate will be incorrect and the system will not operate as intended, resulting in the wrong amount of tax being deducted.

For example, a PAYE taxpayer may become self-employed during the year and in this case the overpayment would be subsequently offset against any Schedule D income tax due. Likewise, a PAYE taxpayer may have received dividend or other non-employment income during the year or a capital gain which has not yet been declared to Revenue. Some reliefs are based on actual expenditure by the taxpayer and can only be claimed when the amount of that expenditure is known, that is, after the end of the relevant tax year. Examples of this are medical expenses, certain dental expenses, third level tuition fees and rent relief. Repayments can only be made in response to specific information being provided for Revenue.

The amount of any tax overpaid can only be established by the individual concerned making a claim and a return showing all income and credits and reliefs due. The vast majority of taxpayers are conscious of the tax credits and reliefs to which they are entitled and, where claims are necessary, they take the required action.

Revenue makes every effort possible to inform taxpayers of their entitlements. In the case of the PAYE sector, the tax credit certificate sent to each taxpayer is accompanied by a detailed leaflet setting out a wide range of information in regard to: main personal tax credits available for the year in question with comparative figures for the preceding year; tax rates and tax bands for the year in question; and the procedures for claiming an adjustment to the tax credit certificate. Where additional tax credits are claimed, the necessary adjustments in the taxpayer's affairs are made speedily.

In the case of self-employed taxpayers and all other taxpayers whose tax is not collected through the PAYE system, a return of their income and a claim for allowances and reliefs is made under what is known as self-assessment. The individual is assessed for income tax on the basis of the income, allowances, deductions and tax credits included in this return. If the self-assessed taxpayer does not make this return — they are obliged to do so by law — it is not possible to determine the allowances and so on to which they are entitled. Refund amounts arising from notices of assessment are refunded to the taxpayers without delay; in some instances, on the same day as the notice of assessment is received.