Budget 2011-Tax Returns

MAKING TAX RETURNS COMPULSORY FOR ALL PPS HOLDERS

At this time of year, those of us with a keen interest in the annual budget dream of standing on the plinth outside Dáil Éireann with that Budget CD – Here’s Idea number 1.

Currently only directors, self-employed persons and persons in public office are required by law to submit a return. Make it compulsory for all citizens holding PPS numbers to submit a Tax Return for every calendar year. This annual return, would simply comprise an Income and Expenditure statement for the year in question.

The Income Statement would include all income sources for the year, for example, employment, welfare, pension, rental, maintenance, nixers and so on.. The Expenditure Statement would include all expenditure for the year, for example, rental, maintenance, child-minding, car servicing, maths grinds and so on…

There are a number of advantages and disadvantages to this proposal depending on your point of view.

a) PAYE workers and Social Welfare recipients would be required to declare all income. 

b) Black Economy workers would be obliged to produce a balance sheet and become legitimate.  

c) Many Taxpayers would be surprised to discover that in fact they were owed money by Revenue.

d) Revenue would readily be able to cross-reference returns for anomalies or under declarations covering all PPS holders, information they would never have had readily available to them previously.

This might sound a bit like Big Brother, but if you accept that a serious budgetary problem needs to be addressed, the obvious place to start is by annually gathering the information to empower Revenue to make the correct and painful decisions required and to create a solid foundation for future sustainable tax planning.