Group calls for changes in tax laws to aid businesses

INTEREST rate penalties imposed by the Revenue Commissioners should be the same as prevailing market rates the Irish Taxation Institute told the Joint Oireachtas Committee for Economic Regulatory Affairs.

Institute President Andrew Cullen said new practical tax administration measures which give real encouragement and help to entrepreneurial activity have never been so critical for Ireland.

Mr Cullen made his comments following consultation with AITI Registered Tax Consultant members, the completion of an extensive survey amongst 500 Irish businesses and the completion of international research.

Mr Cullen said the top three issues which might be of concern if starting a new business in Ireland were daunting and complex tax procedures, missing tax payments and file deadlines and penalties for making a mistake.

The Irish Taxation Institute has brought forward a number of recommendations for the Irish system.

They include aligning interest rates on underpaid tax with market rates; simplifying tax returns; allowing micro businesses to submit one return to cover all business taxes; providing guidance on the most common errors and mistakes in tax returns; increase and align the VAT registration threshold for goods and services to €85,000; extending the VAT cash receipts basis to businesses with a turnover less than €2 million.

Mr Cullen said the research among businesses found almost 60% believe tax administration to be an administrative burden, with VAT and PAYE/PRSI emerging as the top two issues, especially for small and medium size companies.

The majority of those surveyed said it was likely businesses would make mistakes in their tax returns for the first few years.

“95% of businesses said the provision of guidance and information from Revenue on the most common mistakes when filing returns would be highly beneficial,” he added.