The general secretary of the Irish League of Credit Unions (ICLU), Mr Tony Smyth, has said he is confident that the row between his organisation and the Minister for Finance, Mr McCreevy, on having to report to the Revenue Commissioners will be resolved tomorrow. The credit unions have objected strongly to the proposal to require them to report to the Revenue any dividends of over £500 paid to members. Mr McCreevy has offered to return to the position which existed prior to the inclusion of the proposal in the Finance Bill, published last Thursday. This means that it will be up to individuals to inform the Revenue Commissioners of interest earned on credit union account deposits. It is thought that very few people declare interest earned on credit union accounts to the tax authorities. The credit unions will meet Mr McCreevy tomorrow. Mr Smyth said last night that he now felt the problem could be resolved relatively easily. He said people felt very strongly about the issue.
However, depositors will still have to pay DIRT tax for the first time, although this is not an issue which has posed a problem for the credit unions. Mr Smyth said the credit unions wanted their special position recognised in tax law. He said they would be pressing for gross shares to the value of £15,000 to be exempt from tax. Mr Smyth said Mr McCreevy's proposal would mean the names of depositors with £10,000 in savings would be reported to the Revenue. Mr Smyth said Mr McCreevy's proposal did not mean that any interest earned below £10,000 would be tax free. He said the DIRT tax issue of 20 per cent on savings above £15,000 was not a problem for his organisation.
The credit unions are proposing that the tax on dividends above £15,000 be returned to the Revenue on a block basis. This is the way DIRT tax is collected in other financial institutions. Details of the various accounts, including account-holders names, are not passed on to the Revenue.
A spokeswoman for Mr McCreevy said the two sides would have met earlier, but the Minister has to attend an Ecofin meeting in Brussels today. "It is in everybody's interest to sort it out as quickly as possible," she said.
However, she pointed out that it was the credit unions who had first approached the Minister last summer. She said the Minister had had no intention of "doing anything with the credit unions" until approached by them.
