Giving Revenue its due

One of the principal attributes of a politician is a brass neck. That object went on public display last week as Ministers, Opposition spokesmen and Oireachtas committee members lined up to take a whack at the Revenue Commissioners over the issuing of property tax notices. A lack of clarity on payment methods was involved. And a shortage of notice. But, compared to the incompetence of this and previous governments in the operation of such charges, Revenue has done well.

Lessons should, however, be learned. The first is that favouring the convenience of officials in administering the tax system can undermine public support. The second is that much greater clarity is required in communicating. Adequate notice should also be given. An excuse with regard to timing may be found in this year's budget date. For whatever reason, Revenue delayed issuing notices until Michael Noonan had finished the process. By then, only two weeks remained to the required notification date and a backlash guaranteed. The opacity of a formal Revenue letter that suggested six payment options further confused and annoyed people.

Nobody likes paying tax. So, when that prospect offered an opportunity for a justifiable whinge, it was taken with gusto. Short notice was one thing. But the fact that one method of settlement involved paying next year’s tax this year generated real traction. Householders were not alone to be angry. Businesses and retailers accused Revenue of threatening the Christmas retail market by squeezing the spending power of customers.

In Government, clear water appeared between Fine Gael and Labour ministers, with the former suggesting Revenue could be relied upon to correct handling errors while the latter insisted that no property tax should be paid until next year. There is no requirement to make an early payment: householders must choose to do so. Alternatives are available. As the political bandwagon rolled, the Oireachtas Committee on Finance became involved and requested the attendance of Josephine Fehily from the Revenue Commissioners. Opposition parties concentrated their fire on the Government.

To put it all in perspective, it is useful to recall the shambles when the Department of the Environment and councils were given responsibility for introducing a household charge three years ago. It brought an initial compliance rate of some 20 per cent. Before that, a property tax was abandoned because of the high evasion. This tax, organised and operated by the Revenue Commissioners, has an estimated compliance rate of 90 per cent. The economic crash and an excessively narrow tax base made its introduction unavoidable. Yes, administrative mistakes were made by Revenue on this occasion. But they are easily rectified.