Irish tax amnesty yields ‘just €205,000’: Times

A long-running tax amnesty scheme aimed at encouraging Irish tax avoiders to declare their offshore squillions has ended up yielding “just €205,000 for the state” since its finance minister, Michael Noonan,  imposed a 1 May deadline on the scheme five months ago, the Times newspaper has reported.

In its Irish edition, the Times said Noonan had confirmed to its journalists that Ireland’s tax authorities had received “just 20 qualifying disclosures since the deadline was announced last October, while a further two defaulters had flagged their intention to make a disclosure”. In total, it added, these had yielded only €205,102 (US$220,440, £178,260).

Under the Irish scheme, tax defaulters who had been using an offshore vehicle to stash their assets were encouraged to inform Ireland’s Revenue authorities about these, and in return would receive a reduced penalty, the Times said. After the deadline passes, these defaulters will be liable for the total amount of tax, interest and penalties normally imposed for such sums.

Numerous other countries around the world have also introduced tax amnesties over the past two years, in an effort to make the most of a predicted rush on the part of those with undeclared assets to bring them in from the cold ahead of the introduction of the Common Reporting Standard, the OECD’s global automatic information exchange scheme. Some have had dramatic sums reportedly declared.

Among the schemes embarked on so far has been that of Indonesia, which, as reported last October,  was already declaring its amnesty a success, even though it had another six months to run. At that point more than US$263bn in previously-undisclosed assets had been declared by Indonesian taxpayers, of whom more than 347,000 had signed up to receive substantial tax discounts through the programme.

Today, the Jakarta Post noted that the as the Indonesian amnesty scheme enters its final two weeks, the government is pledging to “make an all-out effort to ensure the success of the signature programme”, which it is counting on to  increase its tax revenue by 18% this year,  to US$98bn, “after a disappointing result in 2016, during which it saw tax-revenue realisation up by only 3.5%, despite a boost from tax amnesty penalties”.

In Latin America, meanwhile, Argentina and Brazil are among the countries that have launched tax amnesty programmes, with Brazil announcing last November that it had collected the equivalent of US$15.8bn in taxes and fines under its tax amnesty, after the equivalent of around US$50bn in undeclared offshore assets had been reported.

Mexico joined them by unveiling a tax amnesty scheme itself earlier this year.

Rush of Irish disclosures expected

The Times quoted a number of experts as saying that the Irish tax amnesty was likely to see a rush of disclosures as the deadline approached.

Among them was Brian Keegan, director of public policy and taxation at Chartered Accountants Ireland,  who nevertheless acknowledged that the amount of tax the amnesty has yielded to date was “far less than under previous [disclosure] schemes”.

“€200,000 is absolutely tiny,” Keegan was quoted as saying.

“You’d expect the number to increase from 20, undoubtedly. It’s impossible to make a hard prediction [as to how many disclosures will be made] but certainly while you’d expect the number to go up between now and May 1, it would be foolish to think that this is going to be a bonanza for the Irish government.”

The Times  also quoted Barry Flanagan, a senior tax manager at Taxback.com, a tax solutions website, as suggesting that the level of non-compliance among Irish taxpayers may have been smaller than the Revenue anticipated.

To read about the Irish tax amnesty scheme on the Revenue’s website, and/or to make a disclosure, click here.

ABOUT THE AUTHOR
Helen Burggraf
Helen Burggraf is the editor of International Investment. A US-trained journalist, she has worked in Rome, New York City and London, covering everything from the fashion and retailing industries to the global drinking water and water-treatment sector, private equity, and most recently, the international cross-border financial services/advice industry.

Read more from Helen Burggraf

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