Finance (Tax Appeals) Bill 2015
Wednesday, 16 December 2015

During the second stage debate on the Finance (Tax Appeals) Bill 2015 in the Seanad, I said:  I welcome the Bill and I hope it means that customers, that is, citizens, will benefit from a more transparent and efficient tax system. However, there are a few issues, one of which was raised by Senator O'Brien. The removal of the right to appeal to the Circuit Court is one of the more contentious parts of the legislation. For instance, sections 35, 36 and 38 delete references in the 1997 Act where a party can make an appeal to the Circuit Court. Unfortunately, amendments in the Dáil on Committee Stage to reintroduce the possibility of appeals to the Circuit Court were not accepted...

These amendments also included a proposal to allow a party who wanted to appeal to the Circuit Court regarding a determination by the new tax appeals commission. The references to the Circuit Court should be retained to give people another option for redress. The Circuit Court would also give people a viable and reasonable option for appeal if they were not satisfied. The appeal to the Circuit Court would not always happen but it is a safeguard in place if a person is not happy with a determination of the appeals commission. The massive costs associated with going to the High Court mean that it is not a reasonable option for many people. It must be remembered that people have to appeal on a point of law rather on their own case per se. If the legislation is passed as it stands, it will simply stop many people from appealing and I hope that is not the intention of the legislation. It am sure it is not the intention but it may be the end result.

There is much concern about removing the possibility of the Circuit Court even getting involved in these matters. This is not about clogging up the courts system but about retaining checks and balances. It is about allowing the largest number of people to access redress, which is something the Circuit Court could provide given that the High Court is not a practical option. We know that cases can be very complex and having the Circuit Court as a backup is very worthwhile. One of the members of the Select Sub-Committee on Finance, Deputy Pearse Doherty, said "This is one of the areas in which there was no division among committee members on the question that the right of appeal to the Circuit Court should be maintained". The Government should take that opinion on board. If having the reference to the Circuit Court in the legislation helps just 1% of cases, then it is worth reinstating it into the legislation. I would support this and would appreciate a response from the Minister of State on these concerns.

The Bill provides for the online publication of determinations. Is it envisaged that customers would in future lodge their appeals online? Section 949C, inserted by section 34 of the Bill, covers appeals to the appeals commission via electronic means. Subsection (3) says, "The Revenue Commissioners and the Appeal Commissioners may each, in their discretion, put arrangements in place for, or approve, the use of electronic means for any purpose of this section." I do not think it is good enough in this day and age to leave it to the discretion of Revenue and the appeals commission if they want to introduce an online appeals system. Will the Minster of State consider amending this section to compel Revenue and the appeals commission to introduce an online appeals system within one year on the Bill coming into force? I believe that is what the customer and citizen wants. Substantial work has been done on the Bill and yet this very obvious target has been deliberately left ambiguous. An amendment should be included in the legislation to provide for the introduction of a set date by which the appeals commission would implement an online appeals system. It is a vital aspect if the Government is serious about providing an improved tax appeals system. Is there a target date for responses to the customer? Our current system is overloaded and I would like to see a response time being set in order that the efficiency of the current system could be improved. Perhaps the Minister of State could comment on these areas.

The Bill is about improving the overall tax system in the State and a good effort has been made, but it could be argued that we had a setback in the past year. In its Doing Business 2016, the World Bank reported on Ireland's system.It states, "Ireland made paying taxes more costly and complicated for companies by increasing landfill levies and by requiring additional financial statements to be submitted with the income tax return." This report, which is one of the most important in comparing conditions for doing business worldwide, indicates that we are imposing more red tape on business. Will the Minister of State address this concern, particularly in respect of the increased paperwork imposed on companies in the past year as a result of the requirement to provide additional financial statements with their income tax returns?

On vehicle registration tax, section 2 outlines the various taxes the new system will cover, including income tax and the local property tax. It states the Act will also cover, "any instrument made thereunder and any instrument that is made under any other enactment and which relates to tax", including in respect of stamp duties and of duties related to Customs and Excise. Will the Minister of State confirm that the legislation will cover vehicle registration tax, VRT, which is one of the most contentious taxes? When people import a car the rate of vehicle registration tax is determined based on the so-called open market selling price. Revenue purportedly arrives at a figure by comparing similar models of vehicles. However, this method is highly unscientific when the model is rare or obscure. While this may not affect a large number of vehicles, these types of cases certainly arise and the system has caused much public satisfaction. In the interests of customers, it would be useful if the open market selling price arrived at by Revenue could be appealed.

These are only some of my thoughts on the Bill. I am particularly concerned that Ireland has slipped back from 17th to 23rd place in the rankings of the best places to do business, especially as the Taoiseach's objective is to make the country the best small country in which to do business.

For the full record of this debate, please click here.

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