40% Of Irish Workers Unaware Of Tax Credits: Poll

by Jason Gorringe, Tax-News.com, London

22 June 2009

A high percentage of Irish workers are still unaware of the tax credits available to them, the Irish Taxation Institute said on June 15. Mark Redmond, Chief Executive at the Irish Taxation Institute was speaking at the start of Tax Week, a campaign running from June 14-19 to raise awareness of the key issues around taxation. To mark the week, ITI commissioned a national survey with Red C of attitudes towards tax issues which shows that almost 40% of workers do not fully understand the PAYE tax system in Ireland, and while over two thirds claim to understand their pay slip following the recent supplementary budget, over 50% do not understand how the levies are calculated.

Speaking about the survey results, Redmond said: “This is our second national survey, the first was conducted with Red C in 2006, and encouragingly there has been some improvement with 63% of our PAYE taxpayers now saying they understand how the tax system impacts on them – a 5% improvement in three years. PAYE taxpayers also realize that they can and should actively manage their tax affairs – their tax bill is probably the biggest bill they ever pay and therefore demands far more scrutiny and checking than their credit card bills or any utility bill – especially as it is very often overstated. 19% of PAYE taxpayers now use a tax adviser to help them manage their tax affairs, compared to 7% three years ago.

“However, while over 60% of respondents claim to fully understand the PAYE system in Ireland, this still leaves a massive almost 40% of taxpayers with a gap in understanding and this equates to a sizeable section of the population who may be overpaying tax, under-claiming refunds, or not claiming them at all. Worryingly, one third of respondents said they leave everything up to their employer when it comes to both tax and claiming relief, suggesting that they are neither taking control of nor actively managing their tax affairs.”

“One out of every two taxpayers is still unsure of all their entitlements and the four-year deadline for claiming them. There’s room for a lot more improvement in this regard, and it is needed now more than ever. On top of that, as a result of the October Budget and the emergency Budget in April, we are currently in the middle of massive changes to our personal taxation system, and that’s all the more reason to deliver clarity and understanding of the system to all taxpayers. On that basis, the Irish Taxation Institute is calling for the introduction of a Taxpayer Advocate who would ensure that the rights of individual taxpayers were protected. The role could also include evaluating the fairness and efficiency of our tax administration at a systemic level with appropriate reporting and recommendations for change to Ireland’s parliament (the Oireachtas).”

“Our survey also shows a pragmatic attitude among taxpayers, a majority of whom have accepted that the recent increases introduced in the supplementary budget are necessary for our economic recovery. In fact, it looks like Irish taxpayers are bracing themselves for more increases in the December budget this year, as approximately 60% have indicated that they expect a property tax to be introduced at that stage. Another strong message for government from the Irish Taxation Institute National Taxpayers Poll 2009 is not to remove tax relief for pensions, with over half of all employed adults saying they would be likely to stop or reduce pension contributions if tax relief was removed.”

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