Tommy Broughan (Dublin North East, Independent)
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130. To ask the Minister for Finance his plans to change the operation of the relevant contracts tax system in the construction sector in order to maximise the collection of income tax due to the State. [24509/15]

Michael Noonan (Limerick City, Fine Gael)
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I have no plans to change the operation of the RCT system. Up to 1 January 2012, principal contractors in the construction, meat processing and forestry sectors were obliged to submit to the Revenue Commissioners the details of relevant contracts entered into by those principals and their sub-contractors on a Form RCT1. Under the eRCT system, which came into effect as and from 1st January 2012, the Form RCT1 is no longer used but the same obligation on principal contractors remains albeit the information is now supplied electronically rather than in paper format. 

Revenue's policing of the RCT regime has been significantly improved through a number or risk mitigation initiatives.  Firstly, the old RCT regime provided for the making of RCT repayments to sub-contractors on foot of a claim made by the sub-contractor.  This particular feature of the old regime was open to abuse and consequently the current RCT regime no longer provides for the making of repayments except in very exceptional cases.  Secondly, a VAT Reverse Charge mechanism introduced in 2008 places the responsibility for accounting for VAT on construction contracts on the principal contractor, thereby removing the risk of VAT non-compliance by the sub-contractor.

I know that Revenue commits significant resources to compliance interventions in the construction sector.  There were over 15,000 tax compliance risk interventions in the Construction Sector in 2013 and nearly 17,000 such interventions in 2014. In addition, Revenue works closely with the Department of Social Protection and the National Employment Rights Agency including conducting joint operations in the construction sector with both bodies.