Revenue chairman Frank Daly is behind several inquiries to recoup taxes and is restructuring his office to ensure less is lost in future, writes Siobhán Creaton, Finance Correspondent.

Frank Daly has been a tax man for 40 years. As a member of that cadre he may have been feared and loathed by the general public in almost equal measure, but he claims to have fully enjoyed his career.

Never more so than since his appointment as chairman of the Revenue Commissioners 12 months ago. As the State's top tax man he is spearheading several inquiries to recoup taxes for the State.

He is the man who ordered that thousands of letters be sent to individuals believed to have used bogus non-resident accounts in the 1980s and 1990s to evade taxes. He has also begun prosecuting others who used an unauthorised offshore scheme sold by National Irish Bank to dupe the tax authorities and is continuing to collect money from individuals associated with the infamous Ansbacher deposits.

Mr Daly has also led the first root-and-branch restructuring of the Revenue in its 80-year history to ensure that massive tax evasion schemes such as these do not materialise again.

"We have to ensure that these types of tax evasion scheme do not develop and that if they do that we cotton on to them very quickly. You may be very chuffed with the journalists who uncovered them but we would have preferred to have found them ourselves."

Last week Mr Daly told the Dáil Public Accounts Committee that a primary reason for some wealthy individuals being able to evade tax was because the Revenue was simply not tracking all of their affairs. Within the existing structures, tax officials monitored the collection of individual taxes, such as VAT, PRSI or capital gains taxes rather than focusing on all tax liabilities owed by individual taxpayers and firms.

In the past the biggest offenders went undetected because they were registered for various taxes in different tax districts and the flow of information was restricted.

"Taxes, Customs and the Collector General all operated as separate organisations rather than as one. We didn't know our customers, the taxpayers, as well as we should have. We are now refocusing to take a whole case approach," he says. The planned changes will mean that in future tax officials will gather all information on each individual taxpayer and firm routinely. Through a new risk-assessment computer system, due next year, they will also be able to determine quickly the tax that should be paid by various industries and sectors, weeding out potential offenders for immediate audits.

Already a large cases division and the prosecutions division have been set up, while the south-east is preparing to switch towards dealing with all aspects of taxpayers affairs rather than collecting and monitoring specific taxes.

"It's like a tanker, it takes a while to turn it around. You can never be sure that any structure is right. The old structure was right for that time. I have worked here all my life. Revenue staff are the best of civil servants. If it doesn't work we will have to be honest enough to change again. But I am very confident this is right."

Mr Daly has three clear priorities. "I could tell you about airy fairy notions of being the best tax authority in the world. I think it is better to be focused on three or four practical deliverables that will make us the best or will give people confidence in the Revenue. We will be judged on results."

Apart from the restructuring, the Revenue chairman still has to resolve what he describes as "legacy issues", namely the investigations into bogus non-resident accounts, Ansbacher and the NIB investment scheme. The tribunals that sit just across the yard from his office in Dublin Castle have also thrown up other issues that the Revenue will have to tackle.

"People didn't pay tax. They should now pay that tax plus the penalties. The attitude towards tax compliance is changing and it is essential that Revenue is seen to be following through on these issues."

When asked how such massive tax evasion had escaped the Revenue's attention for so many years, Mr Daly says it was part of a culture at that time. "It was partly due to the belief that if you hold out long enough Revenue will walk away. This won't happen any more. There was a tolerance of tax evasion and of avoiding tax. There was a view that we were a very high tax regime and this gave people a 'justification' for avoiding and evading tax. That is no longer the case. We are not a high tax country any more."

He says it could also be accounted for by a lack of understanding that by depriving the State of taxes, offenders were also depriving themselves and their neighbours of essential public services.

"Maybe in the past we have not done as well as we should have in making the link between tax revenue and the well-being of the country. Taxes pay for 90 per cent of public services such as roads, health and education. If the people who avoided DIRT and other taxes had made this link, who's to say what type of services we could have now? If tax revenue falls either we end up with a lower level of services or everybody will have to pay more tax."

The Revenue's own figures for 2001 recorded that just 22,471 of the 2.8 million Irish taxpayers declared an income of more than €100,000. Many high net-worth individuals paid tax at a rate of just 15 per cent that year using elaborate tax breaks to shield their tax liabilities. Daly is quick to point out that Revenue is not responsible for our tax policy, nodding towards the Department of Finance,

"It is a fact of life that there are tax breaks. They are a very valid part of economic development. I could think of a lot of development that wouldn't have happened without them, primarily the International Financial Services Centre.

"At the moment the Minister for Finance is examining the continued need for some of these. Revenue's role is to try to evaluate the tax cost of these breaks."

These kind of statistics are hardly music to the ears of compliant taxpayers who's annual contribution to the State's coffers is proportionately far greater than some of our wealthier citizens. The chairman says that while it is easier to collect taxes from the PAYE sector it is strengthening its efforts to ensure that tax payers who have greater opportunities to evade or avoid tax are being closely monitored.

"There has been a view that the tax take for PAYE workers is disproportionate to self-employed but this has changed. The reality is that most tax breaks by definition are availed of by the well-off. They have the money and the advice to do that."

He says he was taken aback at how surprised many of the more than 20,000 recipients of the DIRT letters were to find themselves in the Revenue's sights given the forewarnings.

"The inquiry letter is just that. People have said they shouldn't have gotten those letters for reasons such as they had been living abroad at that time. These people should just ring up and tell us their circumstances. We may look for some level of proof that they were living abroad and this can be dealt with very quickly."

The last batch of people to receive these letters have until March 27th to regularise their tax affairs. Further letters will be dispatched later this year, with the Revenue aiming to finalise the inquiry as soon as possible.

The inquiry letters have so far resulted in the collection of €126 million, bringing the total amount collected since the DIRT Inquiry to €560 million. Mr Daly refuses to speculate on how much money may still roll in but says the efforts have been valid and worthwhile.

A few individuals have to be tackled in the Ansbacher inquiry - a more complex inquiry as much of the crucial information is held in offshore sites such as the Cayman Islands. Those depositors have lodged some €21 million with the Revenue as a payment on account before a final settlement.

"I favour a sharp intensive approach and would hope to put it to bed within a couple of years. We may end up going down the route of assessment and enforcement to a greater extent than with the bogus non-resident accounts. We have more information in our hands about bogus non-resident accounts; with Ansbacher we have to extract a lot more," says Mr Daly.

The NIB inquiry is concluding with fewer than 10 individuals expected to be prosecuted. It has resulted in the collection of €42 million. On top of all of this Mr Daly says he can't lose sight of his day job of collecting taxes and of supporting his customs and excise team in keeping drugs our of the State.