Emmet Stagg (Kildare North, Labour)
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Question 98: To ask the Tánaiste and Minister for Finance if, in view of the report of the Comptroller and Auditor General that €45 million in tax revenue accruing from business owners or the self-employed had been written off over the 2002 to 2006 period, he will review the recovery mechanisms used to recoup such tax revenue; and if he will make a statement on the matter. [2333/08]

Brian Cowen (Laois-Offaly, Fianna Fail)
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The collection and recovery of tax and the specific circumstances in which tax may be the subject of write off is a matter for the Revenue Commissioners. I am advised by Revenue that its primary focus and priority is the collection of tax. Inevitably, however, cases do arise where, because of the particular circumstances, collection of the tax is not possible or the tax cannot be collected without disproportionate cost to Revenue. In these circumstances arrangements are made to pass the tax as irrecoverable. This is a step that is not lightly taken and each case is subject to review in accordance with strict guidelines before the decision is taken to write off the tax debt. Furthermore the process is then subject to audit each year both by Revenue's own Internal Audit Unit and by the Comptroller and Auditor General.

The figures for write off for each of the years 2002 to 2006 are set out in the table below.

In 2006 a total of €120m was deemed to be uncollectible and written off by Revenue. At 0.19% of gross receipts, this was the lowest ratio of write off to gross receipts over the period 2002-2006. This includes both personal and business taxes and PRSI.

In relation to businesses, the grounds for write off can include liquidation, receivership and examinership, which are formal legal processes.

I am assured by the Revenue Commissioners that they seek to maximise collection and that write offs are very carefully monitored. Strategies and methodologies adopted to achieve debt reduction mainly through collection and recovery are the subject of annual review and evaluation that is carried out within the context of the business planning process. Two significant areas of focus by Revenue are maximising the timeliness of voluntary compliance and reducing the level of accumulated debt. Revenue's performance on both these fronts in recent years has been very effective. In addition, the new Revenue Statement of Strategy 2008-2010 that will be finalised very shortly will set out the broad direction and focus of Revenue with regard to debt management for the next three years and seek to build on the very good progress in debt reduction that has been achieved in recent years.