Tuesday 20 March 2018

Revenue warns of fall in tax-take if 'perverse' staffing cuts go ahead

Colm Kelpie

Colm Kelpie

Even the taxman isn't safe from the cuts -- with the Revenue Commissioners issuing a stark warning that the level of tax collected next year will fall if they're forced to go through with proposed staff reductions.

The body has warned that the fall would be disproportionate to the amount saved.

Officials have estimated that €142m would be lost in taxes if they are forced to make proposed non-pay cuts of €15m.

A further €27m will not be collected if plans to reduce staff by 116 goes ahead.

The €15m non-pay figure is understood to be a starting position in negotiations between Revenue and the Department of Public Expenditure and Reform in cuts to its budget for 2013.

In a hard-hitting submission, the committee was warned that Revenue would not have the resources to fully carry out its mission should the full €15m figure be cut.

"The principle effect of the cuts will be a negative shift or drop in compliance, resulting in a cash flow estimate of €265m no longer being received in 2013, with a further €142m lost to the Exchequer altogether," the submission said.

"From a fiscal consolidation perspective this would be perverse."

It is understood the cuts would focus on IT-related expenditure and on advertising and office expenses. Some 116 staff would also be let go.

A Revenue spokeswoman said the cuts would cause problems in the collections of taxes, while the reduction in staff would see the audit division and debt management suffering cuts in resources.

However, it is understood the figures are starting positions and would not necessarily make up the agreed final budget cuts.

TDs and senators were questioning Finance Minister Michael Noonan on the finance group of estimates for next year.

Fianna Fail's Finance spokesman Michael McGrath said the Comptroller and Auditor General was also concerned that further cuts to its budget would leave it unable to fulfil its constitutional mandate.

But Mr Noonan said the organisation was putting forward a negotiation position.

"They're making the best case possible and they're taking up negotiating positions to give them the strongest leverage when they come to agree the figures," he said.

Meanwhile, Mr Noonan also stressed that a property tax would be introduced next year, most likely in July, but he said no decision had been made on its implementation.

"It will be coming in on Budget day and the Revenue will collect it and the other decisions have yet to be made," he said.

He reiterated that he did not agree with the IMF that €1bn could be raised.

Mr Noonan said the economy was expanding but that external growth had deteriorated. However, he said he believed the country was on track to bring the budget deficit down to 3pc of GDP by 2015.

Irish Independent

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