Department of Finance makes amends following €100m tax error

The Department of Finance has been forced to take the unusual decision to revise Exchequer returns for March, after it was discovered as much as €100 million in collected tax was wrongly classified as VAT.
 
It was found the collected tax should have been classified as income tax, the department confirmed yesterday.
 
Irish businesses pay tax to the Revenue Commissioners and the department is investigating the possibility that the error transpired when the funds were transferred from the Revenue Commissioners’ bank to the Central Bank.
 
The issue is being blamed on a “coding error” by the Central Bank, which saw the monies incorrectly classified on transfer.
 
The Department of Finance confirmed that while the funds had to be reclassified, there was no change to the overall tax take.
 
Last month’s Exchequer returns for the first quarter were released last week and indicated a rise in employment was beginning to reap dividends in the State’s reserves.
 
Income tax receipts were reportedly 3.5 per cent up year-on-year. The additional €100 million in income tax means the knock-on effect from employment is even better than first thought.
 
As a result of this error, February’s Exchequer figures are also to be investigated to ascertain whether the mistake was an isolated incident or one which has been made on more than one occasion.

Revised figures for the two months will now be published at a later date.

Date published 9 Apr 2014 | Last updated 9 Apr 2014