Committee Reports::Report - Appropriation Accounts 1974::02 December, 1976::MIONTUAIRISC NA FINNEACHTA / Minutes of Evidence


(Minutes of Evidence)

Deardaoin, 2 Nollaig, 1976.

Thursday, 2nd December, 1976.

The Committee met at 11 a.m.

Members Present:


H. Gibbons,




C. Murphy,



DEPUTY de VALERA in the chair.

Mr. S. Mac Gearailt (An tArd-Reachtaire Cuntas agus Ciste) called and examined.


Mr. D. Ó Súilleabháin called and examined.

308. Chairman.—On subhead A—Salaries, Wages and Allowances—is the situation adjusted now?

—It is. We are not carrying slack any more.

In other words, you are going to show a tightened net?


A good example from the Taoiseach’s Office.

309. Deputy C. Murphy.—On subhead D

—Information and Public Relations Services—would that come up in following years? Who was responsible for the delay in clearing the final accounts?

—There are items in respect of that service in two of the following accounts. It took a long time to clear it up and make the final payments.

Chairman.—Is the matter of administrative detail completely cleared up?



Mr. D. Ó Súilleabháin further examined.

310.—Chairman.—This is simply a grantin-aid and the annual report has been circulated to us. It is a grant simpliciter. Are there any questions? Is there anything the Accounting Officer would like to say?

—No thank you.

The witness withdrew.


Mr. T. P. Linehan called and examined.

311. Chairman.—On subhead A—Salaries, Wages and Allowances—there was less than granted. There is no note here but the sum is fairly substantial. What is the explanation of that?

—There is often a certain margin of difference because we generally budget for the filling of all vacancies on a 12-month continuing basis, but because of people moving out and delays in appointments there is frequently a small margin in that direction.

I suppose there is a certain amount of floating expert personnel coming in and going out of the Department?

—Not on the professional end. There is quite a turnover in the clerical assistant/ clerical officer end but not a great flow at the professional end.

312. Deputy MacSharry.—On subhead B —Travelling and Incidental Expenses—of all the Departments you would use the computer pretty continuously, would you not?

—We have a continual use of it.

You will not be estimating under subhead B in future?

—It will also come up in the next year, in 1975, because we have put in an anticipated charge, which we did not have to meet, but from 1976 onwards we will not be charging it in our Vote.

313. On subhead D—Collection of Statistics—are the statistics compiled by your Office a part of the statistics published from EEC sources?

—Yes, we have very close ties with the EEC. When figures are published from Brussels the Irish content of those figures more or less would be coming from or mainly through the Central Statistics Office here. If the figures are published by the Statistical Office of the Community (Eurostat) then they would almost always have come from us, but there may be some figures released from time to time by the other Directorates General in Brussels and all those would not necessarily have been supplied specifically by us. But, again, a proportion of it would have to come to them from Eurostat. They have a certain amount of direct collection also, but we have very strong ties. In fact one of the factors that has increased substantially the activity of our Office is the connection with the EEC statistical system. We service about a hundred meetings a year mainly in Luxembourg but sometimes in Brussels.

314. Deputy H. Gibbons.—Does this extend to the OECD?

—Not to the same integrated extent, but we supply a lot of regular routine information to the OECD statistical secretariat. However, they also collect certain information directly from other sources.

315. Deputy C. Murphy.—Was there a difference in this particular year as between statistics in agriculture from the EEC and the statistics from the Central Statistics Office? There seems to be some disparity in the figures. Do you recall that a few years ago the figures coming out from the EEC seemed to be different from those coming from our own statistics office?

Deputy H. Gibbons.—It was I who raised it at that time. It came up at Question Time, I think, the day before and, on checking up on it subsequently, I found my information was not as correct as I would have liked it to be.

—I think the point the last time arose from two figures being compared together as measuring the same thing when, in fact, they were not measuring the same thing. Perhaps it was really a problem of inadequate description of two figures measuring different things.

I was depending on what I heard in the House. I had not read the complete thing.

—I think maybe it is the same point because it did arise the last time also.

316. Chairman.—Our statistics should be comparable because they are original. You assemble the data and create the original statistic and the others then are derivative. Is that not so?

—They are original material domestically collected.

So that prima facie, so to speak, you are the authoritative source. If a discrepancy arises the only thing that can be wrong is that that discrepancy shows an error on your part rather than that the other statistics are to be taken in preference to yours?

—Yes, but then there is the point that the nine countries of the Community may not always define their statistics in exactly the same way and then the Statistical Office of the Community (Eurostat) would have the function of making certain adjustments, in so far as they could, to try and get them on a comparable basis. In order to make it comparable there may have to be some adjustment.

My point is that you are the collecting source. You are the original source of the statistic and therefore the authoritative source?

—That is correct.

The witness withdrew.


Mr. P. Keating called and examined.

317. Chairman.—Paragraph 61 of the Report of the Comptroller and Auditor General reads:

Expenditure in excess of Authorised Issues.

In paragraph 6 above I referred to payments made from seventeen Votes in excess of the amounts authorised by Section 2 of the Central Fund (Permanent Provisions) Act, 1965. They include payments of some £1,659,320 from this Vote and £215,737 from Vote 47—International Co-Operation. I sought the observations of the Accounting Officer but I have not received his reply at the date of this report.”

Mr. Mac Gearailt.—This paragraph refers to two more of the 17 cases of overexpenditure mentioned in paragraph 6 which has already been discussed by the Committee. I have since been informed by the Accounting Officer that the expenditure involved was incurred during the changeover of the financial year to a calendar year basis when the usual parliamentary financial business had to be effected in the nine months ended 31st December, 1974. Due to delays in the Dáil, these Votes were taken on 18th December, 1974 and the delay in passing the Estimates gave rise to the temporary and regrettable excesses on the Votes. He added that the expenditure was in respect of matured liabilities and could not have been avoided. In the case of Vote 46, Foreign Affairs, he stated that some imprests and expenditure on behalf of other Departments could not have been recovered in the financial year. I should add that, when forwarding these replies in October, 1975, the Accounting Officer explained that in the normal course these replies would have been sent much earlier but because of holiday arrangements in August and his absence outside the State on official business in September and October there was, regrettably, an unavoidable delay in getting the replies to me. Formal inquiries from my office are addressed to the Accounting Officers personally, because their replies must be signed by them personally.

318. Chairman.—I should like to explain that we have had this general problem with the Department of Finance and other Departments and we understand the explanation. Your explanation is acceptable to the Comptroller and Auditor General and to the Committee, but there is one point I would like to advert to because we have been insisting on it with other Accounting Officers. When we have seen—it happened in some cases but not in others—“I have not received his reply at the date of this report”, the Committee have been very definite in their strictures that the Comptroller and Auditor General must be furnished with replies as quickly as possible and facilitated by Accounting Officers in the information he seeks and the Committee wish to emphasise that principle. That particular clause has brought this comment from us on all occasions where it occurred. There were some Accounting Officers who had not been immediately co-operative and that made it all the more necessary for the Committee to comment. In your case, of course, there is a very exceptional circumstance that is completely accepted and understood. You do not mind my making the comment because it has been made to those other Accounting Officers who did not have the same valid reason for delay.

—Thank you very much for your kindness but I must myself apologise for the apparent discourtesy to the Comptroller and Auditor General and to yourself. In fact my reply was sent shortly after his report was signed. It almost crossed with the proofs of his report, but it should not have happened and I apologise.

Chairman.—Thank you very much. It is not a question of discourtesy. In this modern age we are not as thin skinned as that. It is a question of the efficient functioning of the control machine, and regrettably the Committee does occasionally have to insist on the timely carrying out of procedures. I would not have mentioned it at all but for the fact that exactly the same clause is here on which we did comment in other cases, and I emphasise again that both the Comptroller and Auditor General and the Committee are completely satisfied with the explanation.

—Thank you.

319. Now, on the Vote itself, the sum of £932 frozen in an Eastern Nigerian Bank in 1967 was written-off as irrecoverable. It is not a very big amount. There is a Department of Finance sanction here for it which is absolutely regular. Are there any questions on this?

Deputy H. Gibbons.—On the freezing of that money in this Nigerian Bank, what exactly were the circumstances?

—This occurred during the civil war in Nigeria. Before the war started it was possible to send people to the eastern region where the Ibo people were seceding. We sent the first secretary of the Embassy down there. He was cut off during the course of the war and, though this was foreseen, he had to be adequately funded for the length of his stay there. The money was not in Nigerian currency. It was in Biafran currency. That was frozen and the Nigerian authorities after the end of the war froze all funds in banks, including this currency, and did not regard it as an obligation of the Nigerian State. We still make representations from time to time to them on this matter but, so far, they have not seen fit to accede to our approaches.

Chairman.—In the context of present developments it is a matter of history.

—It is, yes.

320. Deputy MacSharry.—What is this student exchange system that your Department operates?

—An Bord Scoláireachtaí Cómalairte operates a certain student exchange system with the United States.

Only with the United States?

—Only with the United States, yes.

What about institutions here catering for the education of Nigerians and other Africans?

—That would not be under student exchange. To some extent that comes under the next Vote.

321. Deputy C. Murphy.—Dealing with the repatriation and maintenance of destitute Irish persons abroad, the note refers to the fact that the number of cases arising during the period was higher than expected. Has this figure been maintained or has it fallen?

—There are two elements in this. The first is the number is somewhat greater. That can be explained by a number of reasons. First of all there is the fact that Irish people are travelling more than they did. Secondly, students who go abroad during the summer are finding it more difficult to get jobs. There is an increase on that. There is also an increase in the subhead from year to year because transport costs are going up considerably and very often it is not possible to foresee the increases in transport costs during the year. The amount of money given in individual repatriation cases is, comparatively speaking, very small. It amounts to about one day’s subsistence and their fare by the cheapest method back to Ireland.


Mr. P. Keating further examined.

322. Deputy MacSharry.—On subhead B.

—Contributions to United Nations Voluntary Agencies—does the United Nations educational and training programme come under this?

—Yes. It is under this subhead that that contribution arises.

323. You have no say in how that money is expended?

—We make a contribution but we have no say in its expenditure. We have, however, a relationship with the development programme in that we attempt to get Irish experts or Irish materials used.

324. There is none of these students under this fund being educated in Ireland?

—No, not under two of the training programmes included in this Subhead, but there may be as many as 20 medical students here under the UN Educational and Training Programme for Southern Africa.

325. You must be aware of the fact that the United Nations still owes some money to the Department of Defence?

—This is a matter we take up with them. The difficulty arises from the difficult financial situation of the United Nations itself at the moment, especially in so far as military operations are concerned. There is also an element of disagreement about some of the expenses involved where the United Nations consider some charges are not, in fact, proper charges to them. They have paid us reasonably well in the past but there is a difficulty at the moment.

Is it your Department that is handling it?

—We negotiate with the United Nations office.

326. Chairman.—On subhead E— Bilateral and other Aid Contributions for Developing Countries—there is a big discrepancy in estimation here between the grant and the expenditure. Is there any simple explanation?

—There are two elements in this. One is that this was one of the first years in which we were involved in a bilateral aid programme and it becomes very difficult to get all you want to do off the ground within a financial year. Secondly, because of expenditure on other subheads in our Vote we were cutting back and trying to economise and keep within the overall limits for the two Votes.

327. Deputy Griffin.—Referring back to subhead D—Disaster Relief in Developing Countries—almost 50 per cent of the Vote was not expended. Has that subhead to be expended strictly on disasters?

—Strictly natural disasters.

It cannot be given for famine relief.

—No. Earthquakes, volcanic eruptions and matters of this kind. It can be used in man-made disasters, such as resulted in Cyprus when there was a war situation and there were many refugees and so on.

328. Deputy H. Gibbons.—With reference again to subhead E, recently I heard on the radio reference to a book written recently. I forget the name of the author and I have not read the book but it seemed to be a very severe indictment of this policy of aid for developing countries and suggests that some changes should be made. The money is not going to the right places. Has the Accounting Officer any comment to make on that?

—In this particular year for example— to revert to a matter which another Deputy raised—we spent money from this on education of Africans through the Institute of Public Administration (IPA) in Ireland. We have given some of the money to State corporations such as SFADCO and in the development here of an anti-leprosy drug. The amount we had been spending until recently was very small. We intend to concentrate on certain countries where we feel we will avoid the difficulties the Deputy mentions. Obviously there are problems of control of these funds. One must be very careful.

329. Deputy MacSharry.—You told me earlier there was no money spent.

—On the other Vote. I thought I said it would not arise under Vote No. 46.

330. There is a way then that Africans being educated here in Irish institutions could or may be qualified for aid?

—It is generally not for secondary school or university students but for officials and people who have finished their training. It is a technical training rather than an academic training.

331. What about regional colleges?

—We have been mostly doing it so far through the IPA but there is a number of regional colleges which may have courses of the type which are of interest to people abroad, mostly officials, as I say.

Have you got any information on that?

—I have not got any information at the moment on any approaches of this kind.

There was a request from Sligo recently?

—I was not aware of that.

332. You said this was the first year.

—This is the first year.

In 1973-74, £150,000 was estimated and for this nine month period £240,000 was estimated?

—The problems are, I think, teething problems and also there was a cutback here, as I mentioned, because of overall economies.

You could not tell us whether the £150,000 estimated was expended in the year 1973-74?

—I cannot at the moment. I can let you know later.

We would be interested to know if it was spent and what it was spent on. We might get some more reasons too as to why the £240,000 estimated for 1973-74, was £150,000 in the actual Estimate we are discussing now.

Mr. Mac Gearailt.—I think there is a misunderstanding. The provision for the nine month period which we are dealing with was £150,000. The provision for 1973-74 was £240,000 according to the Estimate I have in front of me. The 1973-74 Estimate is for a 12-month period. That would be one factor.

333. Deputy MacSharry.—The reason I raised it was because the Accounting Officer said this was the first year it was in existence.

Mr. Mac Gearailt.—There was the Overseas Trainee Fund and my recollection is that two members of the Zambian audit office came over for training in our office and they were, I think, funded to some extent from this fund.

Chairman.—In any event there is a discrepancy prima facie as between the nine months and the 12-month period. It is relevant to the remark that as between these two periods a certain amount of belt tightening was enforced by an oil crisis. That is a realistic point to be taken into account. Deputy MacSharry asked for a note?

Deputy MacSharry.—Yes.

Chairman.—Could you facilitate?


334. Deputy H. Gibbons.—Under this subhead, is any of that money paid into an agency or have we control of the lot?

—Money is paid to the IPA and to SFADCO. Tests were carried out in India by the Irish Medical Research Council and we made a contribution.

335. Is there any general fund to which you contribute and which you can influence in how they spend this money? In other words, have we any control or influence over how other countries spend the money? I am sorry I have not the name of the organisation I referred to earlier but their report was a severe indictment of the spending of the money in the developing countries and suggested the money was not going to the right places.

—We contribute to the UN funds which cover UNDP—the United Nations Development Programme. We give assistance to the ILO, UNIDO and the International Trade Centre. We have limited control over these contributions once we have accepted the proposals put to us. We have to rely on the auditing machinery of these organisations, but before we give the money requests are looked at by an interdepartmental group which decide how it should best be spent.

336. Deputy MacSharry.—Do all these organisations publish an annual report showing specifically where they spent the money?

—They do not give individual breakdowns of grants to different countries. They would give global figures for different countries.

Deputy Griffin.—Was Deputy Gibbons referring to international aid or specifically to Irish?

Deputy H. Gibbons.—International.

337. Deputy Tunney.—On this subhead, E, there is underspending. Have we a more accurate base for estimates at the moment?

—What has happened is that the machinery is getting under way and we are reaching the stage where we are finding pressure on our resources to meet the money needed for our commitments.

338. Expenditure is coming closer to estimates?

—Yes. There was a policy decision that, taking one year with another, we would try to increase our contributions in international aid by 0.05 per cent of the gross national product every year. It was in pursuit of this that these estimates were worked out. As the machinery was set up contacts were made and demands have been coming in more and more. Obviously if you do not have the system going, people do not know where to look for the money and you do not know exactly how you can spend the money to best advantage or how you can judge between the different applicants.

339. Chairman.—We appreciate that, as European and international activities develop, the administrative and accounting loads on your Department become more complicated. We would like to emphasise that there is a growing need that the Comptroller and Auditor General and the Accounting Officer keep as closely in touch as possible to meet the changing problems that may arise. The Committee would like to commend that approach to both parties,

—I can promise full co-operation on behalf of my Department.

The witness withdrew.


Mr. J. F. Richardson called and examined.

340. Chairman.—Paragraphs 11 to 15 of the Report of the Comptroller and Auditor General read as follows:

Revenue Account

A test examination of the Revenue Account has been carried out with satisfactory results.

The net yield of Revenue for the nine-month period ended 31 December 1974 and for the year 1973-74 under its main heads is shown in the following statement:—


Period to 31



December 1974













Estate, etc., duties








Income tax and Sur-tax



Corporation Profits tax



Turnover tax



Wholesale tax











levies, etc.






£521,145,000 was paid into the Exchequer during the period ended 31 December 1974 leaving a balance of £2,800,013 as compared with £1,610,209 at the end of 1973-74.

I have been furnished with the following analysis of amounts of income tax, sur-tax and corporation profits tax outstanding:—


Tax under appeal or under inquiry

Tax not in dispute but collection held up for such reasons as bankruptcy, death, etc.

Tax due for collection

Income tax




(as at 1 June, 1975)












1972-73 and earlier years


















(as at 31 March, 1975)












1972-73 and earlier years














Corporation Profits tax




(as at 31 March, 1975)












1972-73 and earlier years














Comparative totals for the previous year are Income tax, £31,993,350, Sur-tax, £5,002,328; Corporation Profits tax, £7,379,716.

Extra-Statutory Repayments of Customs and other Duties

Extra-statutory repayments of Customs duties, £10,637, Excise duties, £19,265, Value-Added tax, £263, and Stamp duties, £670, were made during the period.

Remissions and Amounts Irrecoverable

I have been furnished with schedules of the cases involving a loss of £100 or upwards in which claims for duty under the Revenue Acts were passed as irrecoverable during the period ended 31 December 1974. The total amount of the items included in the schedules, £99,320, is made up as follows:—



Income tax (126 cases)



Sur-tax (2 cases)




Corporation Profits tax (1 case)


Turnover tax (12 cases)



Wholesale tax (5 cases)



Value-Added tax (1 case)





In all cases tax was written off as irrecoverable because liability was not enforceable, etc. I have made a test examination of the scheduled cases with satisfactory results.”

Mr. Mac Gearailt.—These are the usual paragraphs relating to the Revenue collection and certain repayments, remissions and write-offs. I have no further comment to make on them.

Chairman.—In regard to paragraph 11, though, you did carry out the tests in the department on this occasion?

Mr. Mac Gearailt.—Yes.

341. Chairman.—The results were satisfactory. The revenue yield as between the two periods—nine months as against 12 months—if you make a correction for that, there is a small increase in revenue on that comparative basis?

—That is correct, of course, but I should like to make an observation on that. The change in the period has created certain difficulties inasmuch as the flow of revenue is not even throughout the year, and the three months which were omitted from the calendar year would be the most important ones. The last three months of the previous financial year was the period in which there was the greatest inflow of revenue. While what you say is quite correct, the figures are not strictly comparable.

342. In other words the simple proportion adjustment as suggested would not give a real picture. We accept that. On paragraph 13, the question of tax outstanding, this is an old question that has arisen in other reports. What is the general position in regard to collection of tax? It seemed, taking reports for the last few years, that there is increasing administrative action called for. There was, for instance, a number of cases being referred to county registrars. There were also significant changes in legislation that, undoubtedly, would complicate the administrative problems of the Revenue Commissioners and the Committee would like to be kept informed, generally, as to the situation in regard to tax collection. I am really inviting a very general explanation to keep us in the picture, rather than anything else. A few years ago the proportion of revenue collected to collection costs was very favourable indeed. How is that proportion faring now? I am speaking of the cost of revenue collection in relation to the total revenue collected. If you feel you are in a position to give us some enlightenment on that general area we would appreciate it.

—If I may take you up on your kind offer to allow me to speak generally, I will range a little beyond the period as covered by the accounts under review. I will say. first of all, something which in a narrow sense you may find re-assuring, and that is that the percentage cost of collection has not risen in relation to the total amount collected in spite of the very real difficulties which you referred to earlier on. I mention that in particular because, if one takes this nine-month period which we are confronted with now, the cost of collection, percentage-wise, might seem slightly higher than the norm but that was due to the fact, as I mentioned earlier, that a proportionately larger amount came in in the three months immediately after the nine months now under review. That position has been restored. There may be a marginal increase but the cost of collection is still of the same order as you have been accustomed to traditionally around about 2 per cent, give or take a few decimal points. We regard this as being reasonable in the circumstances and it is not getting any worse up to the last analysis we did. Earlier you referred to the amount of tax outstanding at certain dates Unlike quite a number of other tables in the report, this one is not distorted by the changeover period—the nine-month period —because we take certain dates which, in fact, are outside the period of the accounts. There one can see readily that the nominal amount of tax—if I can put it that way— still outstanding, still uncollected, on certain dates is greater than in previous years. There are two reasons for this. One relates to inflation, that is, any figure which, say, was £30 million the year before this year—the year under discussion now—would be increased simply by the process of inflation, but the difficulties of collection have undoubtedly increased also. In other words, it is more difficult to get people to pay tax in a timely way. The reasons for this are not due to any lack of effort on our part. Some taxpayers find themselves going through bad times. There is no culpable unwillingness to pay but they have liquidity problems and, with the best will in the world, they cannot at times pay their taxes as early as they otherwise would. While we know this, it is not a factor to which we can pay too much attention. We must proceed with the means of establishing their liability, send out demands and so on. This results in a collection position which reflects inflation, together with the difficulties of the tax-paying sector. Taken together they tend to increase the amount of tax outstanding at any point of time in the collection process. At the same time I feel that it would be wrong to leave you with any impression that this is getting out of control. It is not and the measure of this, I would suggest, is that, of the amount we are asked to collect in any year we have always succeeded, except for one period, in delivering that amount, plus a little.

343. Deputy C. Murphy.—With regard to the table at paragraph 13, income tax as at 1st June, 1975, and the comparative totals for the previous year, are these comparative totals for the same date in each case?

—They are. This is the one table perhaps which is not distorted by a relationship to a nine-month period instead of a full period. It relates to an income tax year which has not changed.

344. Chairman.—With regard to your reassurance about the proportion of cost to the amount of revenue collected, I take it you are relating the cost to collected revenue.


Not revenue due?

—To collected revenue.

345. I am tempted, though it is incompatible with my office, to congratulate you on it in a sense, but I suppose this is what we must require. It is a good performance and I would like to thank you for that very clear explanation. Might I make one comment? Possibly this is the one really that I should not make, but would not changing scales, quite apart from capital taxation, have caused delays for the taxpayer? Would not that from the point of view of returns contribute to delays as well as inability to pay?

—This is undoubtedly so. It is difficult to measure or to quantify this, but in that connection we could say that the changes that have occurred in recent years have thrown a burden, not merely on the taxpayer, but also on his advisers. Our information is that accountants’ offices are overloaded as well as our own and, with the best will in the world, they are unable to clear accounts as quickly as they were accustomed to do in the past.

You have no options?

—We have no options.

346. Deputy MacSharry.—Can we take it then that, by and large, each year since, 1975 and 1976, something in the order of £50-£60 million is in dispute one way or the other and is uncollected?

—Yes, broadly

The Revenue Commissioners are carrying that more or less on their books all the time?

—Carrying that on our books. The only observation I have to make, which might be of interest to the Committee, is that we find, and we do not regard this as a reflection on ourselves, that tax in dispute is not necessarily tax collectible. Very often the figures you see here at the end of the day—it might not be in this accounting year or the next accounting year—might be reduced to half the amounts. Until all is determined we have to show the amounts outstanding according to our books.

347. Is there a group of people in the Revenue Commissioners’ Office who could streamline the expertise which has been available down through the years and get a speedier result at the end of the day? It seems to be an enormous amount, 10 per cent of the overall collection, carried on in the books all the time?

—We recognise it as a problem and one to which we should give our minds. We keep it constantly under review. One of the things we are doing at the moment, as well as making certain staff additions to tax offices, which my predecessor referred to in his report to the Committee, is to look at our internal methods of estimating forward taxes to see if we can arrive at figures which, when broken down, will be closer to reality. This is not as easy as it sounds because there are three parties involved—the Revenue, the accountants and the taxpayers. But we have this constantly in mind and are, in fact, doing something positive about it at the moment. What the results will be we will report, perhaps, with your permission, at a later date.

348. Chairman.—Before we leave the question of tax collection, we noted in our last report that the assistants appointed to some of the districts had substantially improved the situation and the Committee felt there might be scope for an extension of this or similar arrangements to other districts?

—This has been done.

Has it been successful? Is the experiment working?

—The experiment is working. We have increased the number by about one-third. What we have found—and this may be a bit disappointing to us and to the Committee—is that the first wave of the operation proved to be much more successful than the follow-up because, putting it this way, there is always cream on the top of the bottle when you come to it first which can be got at easily and collected but, when that is out of the way, the remaining work is much slower and more painstaking. I will give an example of an actual district, say, one that is based on a town. It is very easy to pay visits in the immediate environs of the town and this can be done at once. When you have to visit the outlying smaller towns and villages it is a slower process. While this may be disappointing, nevertheless it is one of the facts we have found. Later progress is not as encouraging as at first. Nevertheless, it is quite definitely effecting an improvement in the position regarding work which would otherwise go to the county registrars.

349. That is not an unusual experience at all. One point I wanted to mention is in regard to the delay in ascertaining claims for collection. You mentioned the difficulty with accountants and so on. Would I be correct in saying that a combination of your computerisation, plus the nature of the Finance Acts in recent years, is more and more taking discretion away from your inspectors? Where they could, so to speak, summarily decide matters with great efficiency, as the past has proved, that particular discretion is being removed by the two factors I mentioned—legislation and the computer—and so are a contributory factor to the holding up of finalisation and putting the collection machinery into operation. If I suggested that would I be completely wrong? It is hard to formulate the question.

—Could I have the temerity to say that you are not wholly right. In other words, I would not say that the legislation itself has this effect but undoubtedly our efforts to streamline and expedite the process of collection has left less time for an inspector to look at individual cases and to say to himself perhaps, I had better send another inquiry to this accountant, which may produce a reply showing that the tax is less than it now seems. So far as we are concerned, however, we have very little option but to lay emphasis on accelerating collection. This can leave less time to an inspector, between the time he gets accounts and the time the documents originate which result in a demand. To the extent that one assigns blame, if that is the right way to put it—

No, I did not mean that.

—No. What I am suggesting is that one would have to attribute it to our attempts to accelerate the process of collection. To put it very broadly, for some years now our attempts have been to get tax which is collectible to the end stage as quickly as possible rather than leave it in different offices or different parts of the Revenue. To the extent that we have been successful in this, we have shortened the time which inspectors can have to tease out cases. But I think, looking at the broad aim of what we have to do, namely, to get in the bulk of the money as fast as possible, we have very little choice but to continue with speedy collection but by examining our processes and re-examining them, we must try to provide more and more time for attention to individual cases.

350. I accept that. In the net I would be interested to know whether computerisation necessarily imposes a certain formal rigidity on procedures?

—Undoubtedly we have that.

351. And then it seems to me, perusing the Acts, that the traditional discretion of the Revenue Commissioners as implemented by their inspectors has been more and more limited. These were really in a sense the two questions in which I was mainly interested. We understand the computer situation now. You have explained it. Would you say that the trend of legislation does tend to restrict the constructive discretion of your inspectors? When I say “constructive discretion” I mean it is like business. We all have bad debts. There is the question of throwing good money after bad or settling for what one can get and making the best deal possible. That, inevitably, to some extent is going to occur for you. You will have bad debts.

—We have them.

And you will have to salvage from the wreckage. One of the great things in the efficient facing of that problem is a sufficient degree of discretion in the agency concerned. My question is: has the trend of legislation which, admittedly, is designed to solve problems—it makes it much easier for the discretionary agency and more comfortable when it is there in black and white but it may not be from the business point of view the most efficient—made your discretion, as implemented by your inspectors, more circumscribed?

—The discretion is not, but the ability to exercise it requires time and, because of the volume of work, the time is not available. There has been no policy of limiting the discretion of inspectors. The computer has actually helped as it has removed a great deal of routine work, leaving them more time. In a way this comes back to a point we were referring to earlier on—the percentage cost of collection. To be able to instruct inspectors to spend more time on individual cases we would need very many more inspectors. Then we have a double problem. One is Vote expenditure and the other is recruitment and training.

352. That is completely understood. Supposing a section of a Finance Act imposes, say, a benefit in kind or in some area where there was discretion before, a statutory description, it seems to me that where the discretion—perhaps benefit in kind is not really the best one to take; the best one to take possibly would be business expenses, but that has not been limited by statute— that kind of discretion which would lead to expedition in decision, which can only be answered by a right statutory provision if there is a statutory provision, and I am thinking of one or two which I would prefer not to mention here for obvious reasons, does this not put the inspector in the position that, before that provision was passed, he could use his judgment to do the best thing in discharging his duty, but now the law can be an ass, so to speak, because it is in black and white and there can be no discretion. Is there a danger, with the way Finance Bills have been going, of that situation developing further?

—Strangely enough, the only particular instance I can call to mind, and this may be a lack of memory on my part, is the one which you mentioned at the beginning where there is a statutory basis now in relation to a benefit in kind and where the inspector’s discretion now is confined to the framework laid down for him by statute whereas previously it was not. I would not think there has been any great legislative development towards inhibiting the normal discretion of an inspector.

353. Some of us think that the discretion vested in the Revenue Commissioners has always been a very valuable thing and has contributed to their efficiency and their excellent relations with the public, in spite of all our grouses about taxation, and some of us feel that, perhaps, with over-specification in the statute, though clearly of great administrative convenience, this discretion might be eroded if the tenor of current Finance Acts continues. I will leave it at that and I do not even ask for a comment. I just want to draw your attention to that.

—Thank you very much.

354. Deputy H. Gibbons.—Will Capital Gains Tax get a heading in future under paragraph 13?

—There will be in due course comparable figures for the new taxes.

Chairman.—We will be asking you about these when they come into force. They were not in force in that particular year?


And they will not be in 1975 either?

—Not significantly.

But they will be in 1976?


355. Deputy Tunney.—What percentage of the total amount under collection at the beginning of the year does that figure represent?

—What amount?

The total amount of the items included in the schedules was £99,320. Could I have a breakdown of that figure?

—You are asking what percentage——

Roughly, what percentage does that figure represent of the total which has been negotiated or contested at the beginning of that year?

—It would be very difficult to say. It is very small.

Deputy MacSharry.—Less than 1 per cent?

—Yes, far less than that.

356. Chairman.—On subhead A.—Salaries, Wages and Allowances—savings were large?

—Speaking of the savings on subhead A, it is only right to mention that there were special circumstances in this year which tended to make the figure larger than it would have been otherwise. It was a year in which posts were created towards the end of the period to deal with the new taxes which were being brought into effect. The provision was made but the recruitment had not taken place. This is a non-recurring event. While there will always be vacancies unfilled, we would expect the proportion of unfilled posts to be smaller in future years than they are this year. This is an exceptional year.

In other words, you expect closer estimation in the ordinary way?

—Yes, there were particular circumstances which gave rise to the surrender this year.

357. How are you managing to keep your expert staffs? Have you any problems there?

—We always have problems because we are continually losing staff. But the recruitment situation has greatly improved compared with the position four or five years ago. This is a sign of the times because there are not so many jobs available.

We have often heard of the poacher turned gamekeeper but you have the reverse problem.

—We have.

358. Deputy Tunney.—In respect of the explanatory note and the reference to staff changes involving appointments at lower points on the salary scales, does that mean that there were firm regulations which allowed you to do something, or was there an actual change of staff to lower points on the salary scales?

—This would arise in what I might call the natural course. If someone retired, he would do so at the maximum of the scale.

359. On subhead B—Travelling and Incidental Expenses—I get quiet amusement when I see reference in a note to a sum which is so insignificant in the totality and it warrants a full sentence. Could the £11 referred to as compensation be included in some subhead where it would not be necessary to make special reference to it in a note or must we count our pennies?

Mr. Mac Gearailt.—All ex gratia payments must be brought to attention.

Chairman.—It is just as well, on principle, that no matter how small such sums are they should be mentioned.

Deputy Tunney.—It is interesting but not significant that out of a subhead of £206,000 we must highlight an isolated amount of £11.

360. Chairman.—On subhead F—Law Charges, Fees and Rewards—rewards would be made for intelligence received?

—Yes. The case which is very often mentioned is the payment to the Gardaí for the discovery of an illicit still.

There was a saving in that area?

—Possibly for reasons which we all know about, but which do not come within our Vote, I imagine that the Gardaí have less time for looking for illicit stills because of other activities.

Illicit stills are a crime, are they not? To operate one is a crime?


361. The principle of giving an ex gratia grant to an officer whose duty is to enforce the law seems a little bit outré but it is a tradition, is it not?

—The care and management of keeping that law properly operated lies with the Revenue Commissioners. If they ask officers from some other Department to help them in their spare time, as it were, it has been accepted that it is right for them to be rewarded.

It probably obviates inspection to some extent?


362. On subhead G—Compensation and Losses—does the note refer to motor car accidents?

—It refers to damages arising out of car accidents. Some of these, while they could be culpable in the strictly legal sense, arise out of the nature of the work. If a lorry is seized, the customs officer is obliged to take it somewhere without knowing very often the state of the vehicle. In one case it turned out that the brakes were non-existent. Fortunately the damage in each case was very small. We have skilful drivers.

363. On subhead H—Expenses in connection with International Organisations— the note says the excess was due mainly to expenditure on travelling and subsistence in connection with the EEC being greater than was anticipated.

Deputy MacSharry.—Do you get any recoupment for travelling expenses from the EEC?

—Yes, and they are taken in as an appropriation-in-aid after they come back.

But not to the extent that many other Departments did. You were £16,000 over and above?

—Ours is quite considerable.

364. Maybe some of these expenses were not incurred going to EEC meetings. It would be your officers going over there to get information for the Revenue Commissioners here?

—There would be that and we also have a connection with another organisation called the OECD, which embraces a number of countries, and the same repayment procedures do not apply in relation to those, though they are very important for us for the purpose of obtaining relief from double taxation.

365. Deputy Tunney.—“Recovery of salary of officers on loan”; to what Department would you loan an officer or to whom?

—I could not answer that in specific terms. Sometimes it would be to the Department of Finance, sometimes to the Department of Foreign Affairs if there was a fiscal element in the business being conducted.

For what period would you loan?

—Sometimes for six months, sometimes for a year. It would depend on the circumstances or the need of the other Department.

Chairman.—Your staff are civil service staff with special expertise.


366. Deputy Tunney.—On the Notes, could we have a comment on the payment of £3,000 to the Director of Stamping?

—This is a very unusual case. Our Director of Stamping is not a technical man. His job is to administer the place. He is a manager. His background is general —let us put it that way. It so happens that he has academic qualifications but they are on the liberal rather than the technical side. A problem arose when we were installing new machinery for the purpose of printing social welfare books. The printer could not come up with a design which would accommodate a variable date and amount. These payments and dates were being changed very frequently and in the interests of economy, we had specified that what we would like him to do was to come up with a machine which by a small adjustment from time to time could change the date and the amount. He was not able to do this and our Director of Stamping, who is very interested in things like this, sat down in his spare time and thought out and perfected a process which he explained to the printer. The printer said: “This will do the job, and in fact, we have other similar work to do for other Governments and we would like to use this idea. We think you ought to patent it” and they adopted it. The result was that our expenditure was less by a very considerable amount, not merely in the printing for this year but every year for the future when we would have had to order these machines, there will be a saving in the capital cost and also the operational costs. The printers valued this contribution at £5,000 and in the ordinary way wanted to pay him £5,000 but, as a proper civil servant, he said: “Oh, no. It could be thought that this has some identity with my work and I feel I would like to get the consent of the Revenue Commissioners before I take anything at all”. We did not regard ourselves as experts on this and we went to the Public Service Department who said: “Look, to have everything right, let the amount be assessed by an independent assessor but, in the meantime, everybody is agreed that at least £3,000 on account should be paid.” Now the independent assessors by agreement with the Public Service Department were the British Stationery Office people who also deal with these matters. They are taking rather a long time to come up with the final figures but there is not any doubt but that this is an enormous contribution and has made great savings to the State.

Chairman.—That is something to be commended.

367. Deputy Tunney.—Supposing the printer had come up with this idea, would he have got the same amount?

—Not from the State.

Chairman.—The State has an interest in it now. If the printer had come up with it he would, in fact, have got a lot more by a different process.

—That is so. He himself could have put a value on it and perhaps either increased or reduced the cost of the service to us. We do not know which. It would have been part of his profit.

We will not go into the ramifications of the operation. It would take us a long time to untangle it.

The witness withdrew.

The Committee adjourned.

*See Appendix 8.

*Includes £567,170 Duty deferred under E.E.C. Regulations (1973-74 £703,183).

†Includes £12,995 Levies deferred under E.E.C. Regulations (1973-74 £8,151).