TaxPersonal Tax‘Big Bang’ minister under fire in euro and tax double whammy.

'Big Bang' minister under fire in euro and tax double whammy.

Irish Finance Minister Charles McCreevy, an accountant, is under fire from his former colleagues in the profession over his ‘big bang’ plans to reorganise the tax year in line with the calendar year.

He is proposing that the switch from a tax year starting in April, which has huge implications for the profession’s workload in filing returns, be implemented in full from January 1, 2002. Compounding the concerns is the fact this is the date when the Irish currency is be replaced by the euro.

Now the Irish ICA – of which the minister is a member – has asked him to reconsider the way in which he plans to introduce the change. As a minimum, it wants him to phase in the new filing times and payment dates.

Under the new plan, preliminary tax will be paid on September 30 in the year of assessment, a slightly longer deadline than at present.

But returns will have to be filed by June 30 the following year – a significant shortening of the nine month period allowed under current rules.

McCreevy told parliament that the change would put tax collection on a ‘more rational and simplified basis’, and that combining this change with the euro changeover would allow IT system adjustments to be made in one go.

The ICAI’s tax spokesman, Kieran Ryan, while acknowledging the planned change follows the practice of many developed countries, argued for a gradual phasing in of the new regime.

‘The unavailability of adequate staff is stretching many practices ability to meet existing deadlines,’ he warned. ‘The prospect of having to do the same work in a shorter time frame, with a tightening labour market, is a serious concern.’ www.icai.ie.

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