DUBLIN: The Irish Revenue has launched a consultation on proposals to redesign and modernize the Pay as You Earn (PAYE) system.
Finance Minister Michael Noonan announced the consultation during his Budget 2017 speech. He said the aim is “to help employees manage their tax affairs better; reduce contact between employers and Revenue; reduce administration costs for both employers and Revenue; improve compliance; and provide up to date information for policy makers.”
The consultation document explained that employers will be required to report to Revenue: payments to employees, information on tax and other deductions, and information about any workers whose employment has ceased, at the same time as they run their payroll. In addition, the final payroll run in the year will generate a pre-populated statement setting out the total tax deductions for the year, for both the employer and employee.
Revenue also intends to streamline employer business processes and reduce the administrative burden by scrapping a number of forms.
Prior to the start of each year, an online statement setting out the tax credits and standard rate cut-off point for the upcoming year will be made available to each employee. Employees will be prompted to make any necessary adjustments, and, based on this information, a tax credit certificate will be issued to the employer and employee, to ensure that tax deductions are correct when salary or wages are paid during the year.
Revenue plans for PAYE Modernization to be operational from January 1, 2019. The consultation will remain open until December 12, 2016.
