Revenue to pursue tax write-offs

REVENUE will continue to pursue companies and individuals for tax that has been written off.

The taxman wrote off close to €128 million in tax last year that it was unable to collect, a 10% increase on the previous year.

It said however that any tax written off will be reversed if recovery prospects improve into the future.

A Revenue spokeswoman said: “With the exception of examinerships, the debt remains on the taxpayer’s record but further collection activity is suspended based on the circumstances of the case at that time.

“If information comes to light that the status of a taxpayer has changed, and that as a result recovery prospects are positive then Revenue can and will reinstate the debt and pursue collection and recovery in the normal way.”

The spokeswoman said that Revenue, like every other tax administration or business inevitably experiences some bad debts.

“Our objective is to minimise these in every way possible through focused and efficient debt collection and recovery programmes. Debt will only be written off when we are satisfied that it is genuinely uncollectible or uneconomic to pursue,” she said.

Revenue wrote off almost €120m in 2006 and €117.6m in 2007.

Last year 88% of the debt written off arose in cases where the business had ceased trading or encountered difficulties, which it said reflects the current global economic reality.

Earlier this week it was revealed that Revenue has agreed to write off a €1m tax bill owed by the Lynch Hotel Group to ensure the troubled group’s survival.

Revenue is owed €1.2m, made up of €689,393 in PAYE and PRSI contributions with €524,083 owed in VAT.

Meanwhile further figures released by Revenue showed it was owed over €1.8bn in unpaid taxes at the end of March. Of that €628m was the subject of appeal and €113m was in installment arrangements where businesses were given time to pay.

“Revenue is very conscious of the impact of the current economic and financial environment on some businesses in meeting their tax payment obligations on time even where they are fully committed to so doing.

“We have always been disposed to actively working with businesses and taxpayers to find a way through temporary financial difficulties provided there is a positive and honest engagement with Revenue and the fundamentals of the underlying business are sound,” said the spokeswoman.

“As might be anticipated, some businesses in the construction/development, hospitality, motor trade and wholesale/retail sectors feature among the businesses that are experiencing particular difficulties in meeting their tax payment obligations in a timely manner.”