The Department of Public Expenditure is facing having to pay about €700,000 in interest to the Revenue Commissioners over delays and inaccuracies in its tax deductions.
Members of the Dáil Public Accounts Committee queried whether the issue was “embarrassing” for the department which oversees public-sector efficiency. The secretary general of the department, David Moloney, told the committee on Thursday that there had been significant errors and he was not happy about the situation.
The issue relates to deductions from the retirement benefits of former public service staff with high-value pensions worth more than €2 million. In such cases the tax is paid by the pension administrator, who recoups the money by reducing the benefits over a 20-year period.
The committee heard that a review of about 20 cases by the Comptroller and Auditor General, Seamus McCarthy, between 2015 and 2023 found that while deductions had, correctly, been made from the pensions, in only six instances had the money actually been paid over to the Revenue.
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Deductions worth about €2.3 million had remained on the books of the department.
A subsequent Revenue sample audit this year identified other issues regarding taxation of high-value pensions. Bernie Kelly, chief executive of the National Shared Service Office, said a review had identified 23 cases where chargeable excess tax (CET) had not been calculated correctly, of which 19 had been validated. She said this had generated a liability of €1.4 million.
Ms Kelly told Fine Gael TD James Geoghegan that about €230,000 in interest payments would be triggered on foot of the liability in the case where the CET had been incorrectly calculated.
The department had earlier told the committee that more than €468,744 in interest payments had been paid in relation to the earlier cases where the tax had been correctly calculated but the money was not passed on the Revenue.
Mr Moloney said it would be a matter for the Revenue Commissioners as to whether further penalties would be applied in addition to the interest.
Mr Geoghegan asked Mr Moloney whether this was “embarrassing” for the Department of Public Expenditure to have to make interest payments to the Revenue Commissioners for the late payment of taxes when it held other departments to account over their spending.
Mr Moloney said he was not happy about the situation and that his department strived to pay people correctly.
