The Latest statement by the Revenue on the Local Property Tax: Joint Committee on Finance, Public Expenditure and Reform Opening Statement by Josephine Feehily, Chairman, Office of the Revenue Commissioners - 29 May 2013. Chairman Thank you for the opportunity to make an opening statement which I hope will help set the context for our discussion. Background At the end of July last year, the Government decided to introduce a Local Property Tax and that, without prejudice to the policy decisions, the tax would be collected by Revenue. Together with my Commissioner colleagues we began to develop an implementation pathway in circumstances where we were missing some key policy decisions, had no Register, no legislation and no IT system. Nine months later, by the end of March, two Local Property Tax Bills had been drafted and enacted, a register had been compiled and an IT system had been built. We were more than half way through the issue of LPT returns in respect of over 1.66 million properties, the first 25,000 returns had already been filed and the first million Euro of LPT had been transferred to the Exchequer. In other words, we had a fully functioning new tax. Because the Register was compiled from several databases we knew that some people would receive letters in error and we flagged that from the very beginning publicly and in our letter to customers. We also knew that we would be missing some properties. Because of the scale, we knew from the start that Revenue did not have the necessary infrastructure to manage the volumes of queries which were inevitable in a new tax, and we made arrangements to manage that with a mix of Revenue and external resources. We had identified risks and had contingency plans in place. We continued to build the register even as the issue of returns was ongoing and ultimately we issued LPT Returns, personalised letters and an LPT Guide in respect of just over 1.69 million residential properties either by post or by way of their Revenue Online Service (ROS) inbox. In our communications plan we also advised property owners that even if we didn’t contact them they have an obligation to file. We carried out an extensive communications campaign and the Citizens Information Service played a key part in informing the public about this tax. Credit Card issue Turning to the credit card issue which the Committee specifically asked that I address, while we certainly had not foreseen it, the systems and people we had in place ensured that we were able to respond very quickly. Briefly, the facts are that late on Thursday night 9 May senior Revenue officials were informed that a member of the public had contacted Revenue’s LPT Branch via the LPT Helpline and reported that unauthorised access to his credit card had been attempted. He advised that he had recently contacted the LPT Helpline and filed his property tax using the Helpline service. Revenue immediately contacted Abtran, the company that operates the LPT Helpline on our behalf. Using sophisticated call recording technology Abtran very quickly identified the agent that took the call from the person in question. Abtran confirmed on early Friday morning 10th May that it had identified the individual involved and had reported the incident to the Garda Siochana. Abtran subsequently also confirmed that the Gardai met and interviewed the person in question on Friday morning. Given that the issue is still under investigation it would not be appropriate to comment any further on that aspect of the matter at this time. Revenue reported the issue to the Data Protection Commissioner also on Friday and while we are continuing to liaise with his Office, the Commissioner has stated publicly that he is satisfied that Revenue acted correctly by reporting the incident to him at the earliest opportunity, by providing him with an early interim report and by ensuring that the persons affected were contacted directly at the earliest possible time. Over the weekend in question Revenue officials were in constant contact with Abtran. It subsequently transpired that the agent inappropriately obtained the credit card details of 11 customers in total. We issued a comprehensive public statement on Sunday 12th May, and engaged extensively with the media on Monday 13th to reassure the public. Copies of Revenue’s statement and a statement issued by Abtran have been circulated for the information of the Committee. Most importantly, I can confirm to the Committee that while the individual in question did try to effect transactions using some of the credit card details he had acquired, he was not successful and no individual suffered any loss. I can also confirm that the individual was not a member of any payments authorised team within Abtran and he had no authority to request such details and should not have done so. Revenue senior officials met with Abtran senior management on the 15th May and conducted a full review of data security and personnel vetting arrangements. The company, which is accredited to internationally recognised security standards including certification for payments security and ISO 27001 accreditation, has on foot of its own internal investigations assured us that the incident was an isolated matter relating to a single individual and was not in any way related to systems or technology, which are fully secure and were never compromised by this incident. Finally in regard to systems and technology I want to clarify that no Abtran employees have any access to Revenue’s computer systems, which are fully secure and were not impacted on in any way by this incident. Outcomes Thankfully, the issue does not seem to have had a negative impact on the numbers of customers choosing to use the "file by telephone" service. In fact, one of the reasons we decided to extend the filing deadline until 8pm today was because of the volume of requests received yesterday to file over the phone – about 8,000 in total. The outcome of the voluntary phase of Local Property Tax has been extremely successful and I am pleased to be able to advise the Committee that LPT Returns have now been filed in respect of 1,517,902 properties. Next week, when the Department for Finance announces the end May Exchequer figures, I expect that it will include over €100 million of this new tax, transferred by Revenue to the Exchequer. This result is a credit to the work of teams of people in Revenue and more importantly to the taxpayers who responded. They show once again that voluntary tax compliance is very high in this country. These numbers do not include about 160,000 residential properties where the local authorities or a social housing group is liable, and for whom special payment provisions were made in legislation. Revenue has made separate arrangements for these bodies to file returns. Including these we have voluntary compliance in respect of some 1.68 million properties. Chairman, I need to explain at the outset that detailed analysis of the returns will take some time and I hope the Committee will appreciate that I won’t have a lot of detailed facts and figures today, bearing in mind that over 400,000 returns were filed since last Friday evening. We have, however, done some work at a high level this morning and I have some preliminary data which I can share with the Committee. For example, 22% of filers filed a paper return, 73% filed online and 5% filed by telephone or through the local tax office network. Provisionally I can say that about 3% opted for deferral or exemption – these figures are smaller than was originally estimated by the Department of Finance. I can also give you some preliminary information in relation to the range of payment options chosen, for example. 46% paid using debit/credit cards. 15% have paid by cheque/single debit authority. 27% have opted for direct debit/ single debit instruction. 5% have opted for voluntary deduction at source. 7% have opted to pay through the external service providers. Next steps The next steps in this project include activating the various payment options chosen, including by sending files to employers and the relevant Government Departments to begin LPT deductions at source. We are now moving quickly into compliance mode and have already begun to identify the non-engagers for follow up action. We owe no less to all the compliant taxpayers who have voluntarily filed their returns. Thank you Chairman
Posted on: Fri, 07 Jun 2013 07:58:27 +0000
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