Revenue defends deducting card payments for property tax

The chairwoman of the Revenue Commissioners Josephine Feehily has stood over the decision to deduct credit and card payments this month for the 2014 property tax on the basis that there are significant risks involved in retaining card details.

Ms Feehily appeared before the Oireachtas Finance Committee this afternoon to explain the approach of Revenue to the collection of the tax, which was first introduced in July this year.

There has been widespread public criticism that taxpayers paying by plastic card have had to pay the 2013 tax and the 2014 tax within one year.

Answering questions from TDs and Senators at a well-attended meeting, Ms Feehily consistently said the retention of credit and debit card data was high-risk compared to the other methods of collection, in terms of security.

Retaining such information would present difficulties when it came to compliance with the Data Protection Act, she said.

The responsibilities of Revenue was to collect taxes in the State in the most efficient and secure fashion, she continued, strongly indicating that Revenue would prefer homeowners to pay using other methods which would allow them to pay in 2014 rather than in November this year. These include a single debit authority (a once-off deduction from a bank account on March 21st next year), or weekly or monthly salary deductions or direct debit payments, which are paid across the entire year.

While insisting there would be no concession in relation to credit or debit cards for 2014, Ms Fehily did say the Revenue would be willing to look at the situation again in advance of the 2015 tax. Nonetheless, she said she could not give any commitment to change. She emphasised the reluctance of Revenue to retain data from cards.

“I can’t look at it for this year. It’s not possible,” she said.

“These risks we have to look at very carefully. We would have to create systems and [would have to] charge taxpayers.

“It’s certainly not possible to introduce it this year. I have committed to look at it for next year. If we got into it, there would be costs,” she said.

Ms Feehily revealed that some 205,000 householders out of 988,000 taxpayers who paid in a single lump payment in 2013 had filed their returns as of today. She said it comprised a compliance rate of 35 per cent, which was very good, as there was still three weeks to go to the online deadline date.

She said there was a definite trend towards taxpayers choosing a single debit authority (money taken from bank accounts on March 21st, 2014) than card payments.

Some 15 per cent of those who had filed already had paid by debit card and a further five per cent by credit card. That total of 20 per cent so far compares to the 53 per cent who chose to pay that method for 2013.

Suggestions were put by committee chairman Ciaran Lynch, Fianna Fáil’s Michael McGrath and Kieran O’Donnell from Fine Gael that a two-stage mechanism could be set up where taxpayers could indicate card payment as their preferred method by the filing date, and then pay by credit card on or before January 1st, 2014.

Ms Feehily responded that if the Revenue did something like that it might not be efficient.

“The person in question would have to think about going back into the system on New Year’s Eve.

“It’s not the date people would be thinking about tax. We would not be doing our job in securing revenue for the state effectively if we said ‘Tell us now and come back in on New Year’s Eve.”

When it was pointed out that such a two-stage arrangement is available for those paying by cheque, she said there were risks involved with cheques. She said Revenue had received cheques with no references to the property and could not apply them to a particular property. She said the cheques were essentially “sitting in a drawer”.

Ms Feehily did concede that the letters sent out had caused confusion. She said given the tax was introduced only earlier this year, Revenue had assumed that people still had the booklets produced then. On that basis the letters had been pared back to basics.

“This was a mistaken assumption on our part,” she said, adding that Revenue had extended the manual filing date to a week from today until November 14th, to accommodate taxpayers.

Socialist Party TD Joe Higgins said Ms Feehily’s appearance was as an alibi or cover for the Government which had introduced the tax and the legislation. Fianna Fáil’s Thomas Byrne echoed those sentiments, accusing Government TDs and Senators of hypocrisy in complaining about the operations of a tax they introduced.

Fine Gael TD Regina Doherty responded to Mr Byrne by saying it was “appalling to sit here and listen to that C-R-A-P”.

In the course of her appearance, Ms Feehily said the introduction of the property tax was the biggest ever extension of self-assessment tax in the history of the State. She told the committee that Revenue had only begun to accept card payments in 2012.

She portrayed this year as an unusual year in that the arrangements for two separate tax years were made within the one year, because the 2013 tax applied for only six months. She said Revenue had to begin contacting taxpayers about the 2014 tax from October to ensure that the systems were in place before January 1st, 2014, for whichever one of the seven payment options they chose.

She did not agree with Mr Lynch in describing the card payments as “premature” or with Mr McGrath who referred to “early payments”. She said the tax was due “on or before January 1”. She said the feedback Revenue had got was that some householders did not mind dealing with the payment now rather than at a later stage.