More powers will be given to the Revenue Commissioners when the Finance Bill is introduced in two weeks, the Department of Finance said yesterday.
The Bill will also introduce measures to tackle the hundreds of Irish-registered non-resident companies in the financial services sector.
Speaking at the presentation of the preliminary list of measures for the upcoming Bill, second secretary at the Department Mr Michael Tutty said there would be measures on both issues.
The detail on the Revenue's additional powers is not yet ready but, according to Mr Tutty, a package will be finalised in time for the Bill on February 11th. The measures are expected to give the Revenue Commissioners greater powers to look into people's bank and other financial accounts in cases where tax evasion is suspected. In yesterday's list, it was proposed to allow changes so that the Revenue would be able to see details of all taxpayers' dealings with the Revenue at one time, allowing consolidated statements. At the moment, tax owing under different headings is dealt with by separate areas in the Revenue which do not have access to full details of all the taxpayers' affairs.
On non-registered companies, Mr Tutty said the authorities still had no real idea how many there were, or how to come up with a mechanism for checking. But he confirmed that action would be taken to limit their activities, which are thought to be damaging the international reputation of the IFSC on both the company law and the tax side. "The Finance Bill will only tackle the tax side," he said.4
The Bill will also introduce new rules on employee share ownerships plans, primarily to give Telecom Eireann employees the right to benefit from the share allocation, even if they leave the company. The Bill will also increase the normal £10,000 (#12,697) tax free limit to £30,000 when the shares are taken after 10 years. These measures will also apply to any other employee share ownership scheme which is set up in the Republic.
Further measures will also be introduced to increase the size of the tax-free lump sum allowed following a redundancy. The basic exemption will be increased to £8,000 as well as £600 per year of service. The current limit is £6,000 plus £500 a year.
The Department is proposing to extend the Business Expansion Scheme to companies quoted on the Alternative Investment Market in London and similar secondary markets across the EU.
The threshold for residential property tax is also to be increased to £180,000 from £138,000 for any further arrears to be paid - following its abolition in 1995. However, Mr Tutty said this may need to be increased again by the beginning of February given recent increases in house prices.
Bord Gais is to become eligible for corporation tax for the first time, in line with practice among the other commercial semi-states. However, the Department is not expecting a windfall into the Exchequer given the amount of capital investment the gas company can write off.
The Department intends to crack down on shops here which overcharge tourists on the VAT repayment scheme. They will now have to notify the traveller in writing of any mark-up charged for refunding VAT.
Other measures include allowing the trust funds of anyone who is totally and permanently incapacitated to be free of both income and gift tax.
The list included details on measures which were previously announced by the Minister for Finance, Mr McCreevy, at the time of the Budget, such as details of income tax limits and most benefit in kind changes. However, the issue of benefit in kind on carparking spaces has been passed on to a working group. According to Mr Tutty this is a very difficult issue but officials from the Department of Finance and the Revenue Commissioners are working on it. The Department gave further particulars on the proposed extension of urban renewal and other schemes. Most of the deadlines have been extended from April or June this year to December. Because most of these schemes are classed residential, the European Commission does not object to the extension, officials said.
