Seán Fleming (Laois, Fianna Fail)
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147. To ask the Minister for Finance if his attention has been drawn to the extra costs incurred by self-employed persons who have to operate the E relevant contracts tax and almost in all cases need to employ an accountant to deal with these issues whereas under the previous system many self-employed persons could operate the system on their own without the cost of having to pay accountants in most cases a minimum of €1,000 per annum out of their self-employed income; and if he will make a statement on the matter. [36377/18]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that Relevant Contracts Tax (RCT) is a withholding tax mechanism designed to improve tax compliance in certain industry sectors that were historically identified as presenting compliance risks, namely the construction, meat processing and forestry sectors. It operates in a similar manner to other withholding taxes including those in place in respect of share dividends and certain professional services. 

A paper based withholding system was in place until 1 January 2012, when the electronic RCT (eRCT) system was introduced. The electronic system streamlined the administration of RCT, reduced the opportunity for fraud, improved the cash-flow position of compliant subcontractors and significantly reduced the compliance burden for persons operating the tax. For example, eRCT eliminates more than 1 million paper returns annually, reducing the cost of compliance to business by an estimated €85 million. In addition, Revenue uses the data collected through the eRCT system to pre-populate annual tax return forms thereby further assisting taxpayers to meet their obligations while also reducing compliance costs.

Revenue has assured me that the eRCT system is a flexible, user-friendly tool that can easily link in with other software packages that Principal Contractors can use to manage their own financial affairs as well as fulfil their RCT obligations. Revenue has also confirmed that the eRCT system is supported by extensive published guidance and it should not be necessary for taxpayers to engage a tax agent to operate it.