Three quarters to be taxed online by 2005

20 Feb 2003

E-government services, or lack thereof, appear to be coming under fire at present, made all the more poignant by the fact that the much-vaunted Public Services Broker, the electronic clearing house for a wide range of public services, appears to be stuck in a financial quagmire over operating costs.

However, the one area of the Government’s electronic strategy that appears to be bearing some fruit is the Revenue On-Line Service (ROS), which so far has brought some €6.2bn across all the various tax heads that the Revenue Commissioners have succeeded in e-enabling. As well as this, some €517m in Vat repayments have been enabled through the ROS since its inception.

Established in September 2000, the ROS system had succeeded in bringing in some €1.5bn in PAYE and Vat from businesses within its first six months and encouraged by this success, the service, under the guidance of ROS strategy manager, Margaret Whelan, has evolved to include a variety of key business areas, most recently vehicle registration tax (VRT).

Unveiled in November, the VRT collection mechanism on the ROS site allows car dealers and distributors to file VRT40 forms. According to Whelan, some 40pc of all new car registrations – some 22,606 cars – have been executed on the ROS site.

“Since we introduced the VRT aspect to the site, on some days as many of 60pc of all new cars in the country were registered on the service, with Cork being one of the most active locations for filing new cars online,” she explains.

According to Whelan, the €6.2bn collected by electronic filing represents over 10pc of Ireland’s self-employed income tax, 17pc PAYE/PRSI and 15pc of Vat. The introduction of VRT is just one of a variety of services that the Revenue Commissioners is planning to add to the existing areas of PAYE and Vat collection online.

“The target within the Revenue Commissioners is to have 50pc of all tax filings done online over ROS by 2005, whilst 75pc of all tax payments will be done electronically by such methods as direct debit, Laser card and other electronic methods by the same date,” she says.

Whelan explains: “Most of the business tax returns we receive online at present are based on employer and income tax returns, as well as a fleet of returns from the financial services sector such as DIRT (deposit interest retention tax), taxes on professional services, dividend withholding tax, investment undertaking tax, life assurance exit tax, taxes on SSIAs (special savings incentive accounts) and environmental levy tax.”

She explains that in coming months the ROS will be branching out and starting to enable the filing of other taxes such as capital taxes, gift and inheritance taxes. “We are currently working with the Law Society and the Institute of Taxation to finalise online filing of gift and inheritance taxes. At the same time, we are working to introduce online filing for contract taxes for building contractors. We are then planning to branch out and start enabling the filing of customs and excise taxes such as transit return for freighters, carriers and hauliers. The latter will provide for the new European Computerised Transit System, which is basically electronic tracking of movements of goods within the EU for importers and exporters,” she adds.

In terms of reaching the target for having 50pc of all business taxes filed online, Whelan says: “We are quietly confident at this point in time. Accountants have told us that they find the online service useful because they can use the service outside of traditional business hours, whereby they can gain instant access to client details.”

An interesting innovation that the ROS is currently planning to introduce is the provision of tax credit certificates to employers online. “Basically, the way the system will work is that the employer will receive an email to go to an area of the ROS site that will be secured with a digital certificate from Baltimore Technologies,” Whelan says.

Another momentous event in terms of online taxation will be the imposition of Vat on all e-commerce transactions in the EU on 1 July. “Essentially any e-tailor based outside the EU that is selling to someone inside the EU will have to register for Vat in an EU member state and complete a quarterly Vat return. We intend to have a system in place for e-commerce Vat filings later this year,” Whelan explains, adding that her objective is to have the entire suit of Vat filing available on the ROS site this year, including Intrastat and VIES (Vehicle Import/Export System).

On the remarkable progress so far achieved by the ROS, Whelan says: “Our policy has always been to think big, start small, scale fast. We have had an aggressive scheduling of phases and that has been working successfully.

“In terms of VRT, our aim is to increase the filing from the present rate of 40pc of car dealers and distributors to some 80pc sooner rather than later,” Whelan concludes.
By John Kennedy