Ireland’s Tax Collection And Payment System Too Costly For SMEs, Says Deloitte

by Jason Gorringe, Tax-News.com, London

08 March 2005

According to business services firm Deloitte, senior executives in Ireland overwhelmingly believe that the present tax collection and payment system is too costly, and overly complicated, especially for small and medium-sized firms.

This consensus emerged at Deloitte’s Finance Bill breakfast last week, where more than 90% of the 250 attendees were of the view that that the present system of making up to five tax payments in a calendar year should be restricted to larger taxpayers.

Commenting at the breakfast meeting, Pat Cullen, National Tax Partner with Deloitte, argued that the Revenue Commission should estimate the threshold of profits or income that is required to generate 80% to 85% of the revenue from corporate and personal taxes.

According to Mr Cullen, by applying the multiplicity of tax payments to only the larger taxpayers, the system could be simplified for more than 80% of taxpayers, with no significant change on the timing of tax receipts.

Almost 90% of the executives at the meeting also believed that the requirement to pay capital gains tax in multiple instalments should apply only to those with a liability of more than EUR100,000.

In another interesting finding, the survey revealed that more than 60% of the senior executives were aware of the Compliance Statement required under IAASA, but were not familiar with its requirements, despite the fact that these may become mandatory for larger firms, for accounting periods after 1st July this year.

“This Statement, which requires directors to confirm that they have in place systems and are actively reviewing them to ensure compliance with Company, Tax and other laws is a significant issue for business. However, little has been done to alert directors to the requirements,” observed Mr Cullen.

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