Tax receipts hit record highs in 1998 with the collection of £20.6 billion (€26.18 billion) by the Revenue Commissioners but public confidence in the tax collection system was damaged by disclosures of tax-evasion.
The 1998 annual report of the Revenue Commissioners shows that gross tax receipts at £20.6 billion were £935 million ahead of the Budget target, up from £18 billion in 1997. The average amount collected per working day was £67 million, with 2.1 million payments made during the year, according to the chairman of the Revenue Commissioners, Mr Dermot Quigley. Some 97 per cent of the payments to the Revenue were banked within 24 hours, he said.
After repayments made to business and individuals, the net receipts were £15.9 billion, some 14 per cent ahead of 1997 levels. Targets for all tax receipts were exceeded.
Mr Quigley said the main driver of the growth in tax revenue was the buoyancy of the economy with about 70,000 more people at work and 144,000 new car sales. In addition, improved tax-collection procedures had played a role, he added.
Income tax remained the single biggest contributor to total receipts, chipping in £6.3 billion, (or 31 per cent) of the total £20.6 billion. Of the net receipts, PAYE was the largest contributor, accounting for £4.76 billion of the £15.9 million collected. PAYE receipts increased by 9.2 per cent in 1998.
Value Added Tax was the next largest contributor, representing £4.3 billion of the net receipts, up 15 per cent on the 1997 level. Corporation tax receipts at £2.1 billion were 21 per cent stronger boosted by the general increase in the taxable profits of companies and the strong growth in the formation of new companies.
Excise taxes generated £2.8 billion, an increase of 12 per cent, driven by increased consumer spending and the Budget increases in duties on tobacco and petrol.
Despite strong tax receipts, the Revenue Commissioners have admitted that public confidence in the system has been damaged by the disclosures of tax evasion during the year ranging from the NIB scandal, the AIB and DIRT payments revelations and the disclosures at the McCracken and Moriarty tribunals.
"All of us in Revenue are working hard to repair that damage. Nothing is more important to us. We want to reassure people about the even-handedness and correctness of our approach to tax administration," the report states.
Mr Quigley accepted that questions have been raised about the Revenue's performance, but he rejected any suggestion that the Revenue was "in some way a law unto itself", arguing that it was accountable to the Minister for Finance and Oireachtas committees "and ultimately to the taxpayers who pay our salaries".
He accepted that "we have to win back credibility lost with some tax payers". The approach to rebuilding credibility has two elements: The first is to encourage voluntary compliance through better services to taxpayers and less red tape. The second element is to use the resources freed up by better voluntary compliance to tackle tax-evasion.
"We intend to redouble our efforts to satisfy the general public about our credentials in curbing tax evasion," the annual report states.
One of the ways the Revenue plans to rebuild confidence is through a more active prosecutions policy. Prosecutions for tax and custom offences increased in 1998 with six prosecutions for tax evasion completed and convictions obtained. Three more cases are before the courts and 25 other cases are at various stages of investigation.
In the 1999 Finance Bill, the Revenue was given increased powers, including the power to examine bank accounts where tax evasion was suspected. Mr Quigley said it was important that the Revenue used its new powers and was seen to be using them. The imminent application to examine the Ansbacher deposit accounts would involve the use of these powers.
