Written answers

Tuesday, 6 July 2010

10:00 am

Photo of Mary O'RourkeMary O'Rourke (Longford-Westmeath, Fianna Fail)
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Question 132: To ask the Minister for Finance the percentage of the judiciary now paying the levy; if he will name those who have paid and those who have not paid. [29343/10]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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The Financial Emergency Measures in the Public Interest Act 2009 does not apply to the Judiciary for constitutional reasons. However, arrangements were put in place on an administrative basis between the Chief Justice and the Revenue Commissioners in April 2009 to facilitate voluntary payments by members of the Judiciary in the context of the pension related deduction scheme. I have no function in relation to those arrangements. However, I understand that information in relation to the voluntary payments in 2009 was published in Revenue's Annual Report for that year. This showed that by 31 December 2009, 109 Judges had paid, or made arrangements to make voluntary payments, under these arrangements. The Annual Report also showed that payments amounting to just over €652,000 had been received by the Commissioners by that date. In addition, commitments via standing orders, etc, which amounted to €56,800 per month, had been given. I am further informed by the Revenue Commissioners that arrangements with individual judges are personal information and are confidential. The Deputy may be aware that Section 161 of the Finance Act 2010 replaced the administrative arrangements mentioned above by providing for a voluntary scheme which enables members of the Judiciary to make a gift to the State of an equivalent amount to the pension related deduction imposed on State employees under the Financial Emergency Measures in the Public Interest Act 2009. Subsection (8) of that Section specifically provides that:

"(8) The Revenue Commissioners shall publish for each year of assessment only details of the number of donors who avail of this scheme in the year, and the aggregate amounts gifted for the year".

The Deputy will appreciate that in view of this provision, personal information such as names cannot be published and neither can information in respect of voluntary payments in 2010 under the Section 161 arrangements be published at this stage, but I understand from the Revenue Commissioners that it is their intention to publish aggregate information in accordance with section 161(8) after the end of the year of assessment.

Photo of Joan BurtonJoan Burton (Dublin West, Labour)
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Question 133: To ask the Minister for Finance the events which led to the acceptance between 1 January 2010 and 31 March 2010 by the Revenue Commissioners of a settlement from Donegal County Council in the sum of €799,928, of which € 547,775 in respect of the under declaration of PAYE and PRSI and €252,153 in respect of interest and penalties; the number of instances of tax settlements and the amount of money in each case, involving a local authority, State or semi State authority there have been in each of the past five years to date in 2010; the schedule of all such settlements; the steps that have been taken to ensure that this does not re-occur in future; and if he will make a statement on the matter. [29350/10]

Photo of Brian Lenihan JnrBrian Lenihan Jnr (Dublin West, Fianna Fail)
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I am advised by the Revenue Commissioners that for reasons of taxpayer confidentiality, they do not comment or provide details on individual cases except as provided for by law. The settlement of €799,928 paid by Donegal County Council arising from a Revenue audit was published in Iris Oifigiúil in respect of the period beginning on 1 January 2010 and ending on 31 March 2010. The settlement was made in respect of an under-declaration of PAYE/PRSI and comprised the payment of tax in the amount of €547,775 and the payment of interest and penalties in the amount of €252,153.

I am also advised by the Revenue Commissioners that information in relation to tax settlements is not maintained separately for local authorities, State or semi-State authorities. As I advised the Deputy when replying to a number of similar questions recently, the Revenue Commissioners maintain sectoral audit records on the basis of an internationally recognised 4 digit NACE Code system. NACE code classifications in tax records are compiled by reference to the primary area of economic activity reported by individual and corporate taxpayers on their own behalf. While the accuracy of the NACE codes on tax records is sufficient to underpin broad sector-based analyses there will undoubtedly be some inaccuracies at individual level. This should be borne in mind when considering the information provided as follows: The Commissioners have identified the following codes to be the most relevant to the Deputy's questions: 7511 — General (overall) public service activities; 7512 — Regulation of the activities of agencies that provide health care, education, cultural services and other social services, excluding social security; 8511 — Hospital activities; 8514 — Other human health activities. The first two codes cover many Government Departments as well as other Government Agencies.

Furthermore, the Commissioners have advised me that they have attempted to exclude obvious private sector bodies, which are also included in those NACE Codes because of the activities they are engaged in. On that basis, the following information may be helpful:

Table 1 — Audit Results

Category20062007200820092010 (to March)
Total Number of Audits20362694
Number yielding15282174
Tax*€1,043,571€3,601,000€1,696,000€99,000€576,000
Interest€524,225€406,000€140,000€6,000€91,000
Penalties€240,100€246,000€82,000€17,000€168,000
Total Yield€1,807,896€4,253,000€1,918,000€122,000€835,000
Number Nil yielding5852

*A breakdown on a tax head basis is not available without conducting an extensive investigation of the individual audit records of the cases.

A similar breakdown is not available for years prior to 2006 as this information was not held in a similar format and is not easily accessible at this stage.

Where material issues, giving rise to tax undercharges, arise in the course of an audit, Revenue will pursue payments for interest and penalties. Where it is clear that a taxpayer has broadly done their best to ensure that the tax returns for the various taxes are accurate, adjustments are not made for small inaccuracies.

Revenue also informs me that, as well as audits, they carry out a range of assurance checks to supplement general audit activity. All such interventions are initiated with the intention of assuring Revenue, without recourse to a resource intensive audit or enforcement activity, that the customer is broadly compliant for the taxes and duties, which are the subject of the intervention. Over 350,000 such checks were carried out in 2009 and would have included public bodies. Due to the volume of these assurance checks, they are not recorded by sector.

The Code of Practice for the Governance of State Bodies is very clear as to the standard of tax compliance expected from such bodies. The following is a quotation taken directly from the Code: "State bodies should be exemplary in their compliance with taxation laws and should ensure that all tax liabilities are paid on time on or before the relevant due dates."

The Revenue Commissioners inform me that they have emphasised these requirements on many occasions. Most recently, the Chairman of the Revenue Commissioners personally wrote to the Secretaries General of all Government Departments highlighting the subject of tax compliance in the context of the corporate governance responsibilities of Departments and their Agencies / Public Bodies in the exercise of their official duties. She advised that tax compliance is a matter that should be part of the corporate governance framework and, in particular, the risk management processes of these organisations. Revenue supplied information on the common issues that arise for Public Bodies under all tax heads.

At a local level, Revenue Districts have engaged proactively with public bodies in advising them of their tax and duty obligations. Revenue officials have made presentations to the Heads of Finance of Government Departments and the Finance Officers of Local Authorities at which tax compliance matters were discussed and contact points given to be used if further tax information or clarification was required.

The Deputy may also be interested to know that Revenue is working closely with representatives (generally finance managers) of County and City managers to support compliance ab initio in relation to the introduction of VAT to Local Authorities from 1 July 2010. As part of this communication initiative, wide ranging discussions have taken place on general tax and duty compliance issues.

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