Saturday, January 22, 2011

Revenue to facilitate credit card payment of tax liabilities

Is this a positive or negative sign of the times? Up until now it was not possible to pay your tax bill by credit card. Only laser card, cheque or electronic debits were acceptable means of paying your tax liability which essentially means that you had to have the money in the bank to be able to pay your tax bills.

On the one hand, credit cards are an acceptable means of payment across most sectors of the economy so arguably this could just been seen as the next step for modernising the activities of tax collection and the Revenue.

On the other hand a cynic could perhaps suggest that in these troubled economic times, the Revenue are happy to take money in whatever way they can get it and opening up a credit card payment facility is for just that purpose! It is only inevitable that some cash strapped taxpayers will now consider settling tax liabilities by putting them on their credit cards and will deal with paying off the credit card company at a later stage.

From the perspective of a taxpayer, the more options open to them for managing their financial affairs the better. For anyone using credit cards to pay their tax bills however, don’t forget that credit card financing is one of the most expensive forms there is and we recommend that cheaper financing alternatives should be explored first.

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