Written answers

Wednesday, 4 June 2008

10:00 pm

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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Question 148: To ask the Minister for Finance the change to the Revenue Commissioners approach to collecting tax from businesses in view of the markedly less benign economic climate and recent reports that the Revenue Commissioners are prepared to show firms some latitude in this regard; if the Revenue Commissioners will engage proactively with businesses to ward off problems at a later date; and if he will make a statement on the matter. [21977/08]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that there is no change to their approach to collecting tax from business. The reports to which the Deputy has referred was a reaffirmation of Revenue's long standing message to businesses of the importance of early engagement with Revenue where a business is experiencing difficulties in paying its tax debts. Revenue is not alone in urging such early engagement. Tax practitioners and business representative bodies support the importance of early diagnosis of the problems being faced by a business and timely engagement with Revenue. That encouragement is also something of which I am fully supportive.

Like every other creditor, Revenue wants to be paid what it is owed and on time and will pursue any tax owed with vigour. As the Irish tax and customs administration, Revenue plays a critical role in securing and delivering most of the financial resources required by Government to provide the range of services, facilities and supports that it does. Excellent progress has been made by Revenue in improving tax compliance levels and reduction of the overall level of tax debt, especially in the last ten years. Revenue has assured me of its continuing focus on maintaining that momentum and of its on-going readiness to work with businesses in that process.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 149: To ask the Minister for Finance if he will estimate the number of investment properties in the State for which no rental income is declared; if he will estimate the annual cost to the Exchequer of undeclared rental income on investment properties; the details and the scope of the national investigation of undeclared rental income; and if he will make a statement on the matter. [21980/08]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that, as with all categories of undeclared income, they are not in a position to provide an estimate of the number of investment properties in the State for which no rental income is declared, or the cost to the Exchequer of undeclared rental income on such properties. This is because Revenue can only provide data on the basis of the information that is known to them. While the Revenue Commissioners are not in a position to reliably estimate the level of undeclared rental income, they are satisfied that their compliance programmes cover all economic sectors, including rental income.

For a number of years now, the strategy of the Revenue Commissioners has been to focus compliance resources on the cases with the highest risk, and to do this, they have been developing a risk analysis and profiling system. In the context of rental income, relevant third party information is included in the risk analysis, such as information on property acquisitions from stamp duty data and rental payment information from the Department of Social and Family Affairs. Property letting is also included in "sectoral" compliance programmes carried out by Revenue units from time to time.

I am satisfied that this risk-based approach by Revenue is the correct one.

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