Pearse Doherty (Donegal South West, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

291. To ask the Minister for Finance the revenue that would be raised for the Exchequer, based on the last full year of data, if the surcharge amount applied to late filing of tax returns was increased to 6% after one month and 12% after two months; the current interest rate on late returns; and the estimated return for the Exchequer if interest on late payments was applied to all returns and not left to the Revenue to decide on a case by case basis. [24347/13]

Michael Noonan (Limerick City, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am advised by the Revenue Commissioners that the current rate of surcharge for late filing of both Income Tax and Corporation Tax returns is 5% of the tax due subject to a maximum of €12,695 where the return of income is delivered before the expiry of 2 months from the specified return date for the chargeable period, or 10% of the amount of tax due subject to a maximum of €63,485, where the return of income is not delivered before the expiry of 2 months from the specified return date for the chargeable period 2011 is the most recent full year of data available and for companies with an accounting period ending in 2011, 5,844 were charged a late filing surcharge, totalling, €1,700,816.

In addition, 19,120 individuals were also surcharged for late filing, totalling €3,556,650

However, it is very difficult to estimate the impact on the Exchequer of a change in the rate of the surcharge. The surcharge is designed as a deterrent to encourage timely filings and payments, and compliance levels are positive. The Irish self-assessment system ensures that there are tight controls in place for tax return filing and payment rates which are borne out by the 2012 statistics for timeliness of 98% for large cases, 96% for medium cases and 82% for all other cases, across all taxes.

With reference to the current interest rate on late returns, I am advised by the Revenue Commissioners that late filing surcharges apply to late returns whereas interest is charged on late payments. The current rates of interest on late payments are 8% per annum or 0.0219% per day, on overdue income, corporation or capital gains taxes and 10% per annum or 0.0274% per day in respect of overdue fiduciary taxes such as VAT and PAYE/PRSI.

I am advised by the Revenue Commissioners that given the high levels of return filing and payment compliance that were achieved in 2012, the targeted application of interest charges to cases with the most serious compliance issues is a strategy that has worked extremely well for the Commissioners and has brought about a sustainable change in compliance behaviour in a large number of cases. In addition, it fits with Revenue’s overall approach to compliance matters by deploying resources to the areas with the greatest risks and, the Commissioners further advise that applying interest charges in all cases of late payment would undermine what has been, on a consistent basis, a very successful compliance strategy.

I fully support the balanced approach to collection by Revenue that tries to maximise voluntary compliance with a balanced approach to collection of arrears from businesses that run into temporary funding difficulties. Revenue’s care and management provisions are provided for in legislation and are an integral part of the tax administration system.