The final yield from Revenue's ongoing investigation into offshore assets is likely to be in the region of €1 billion, and the yield from undisclosed funds in life assurance products will be some €500 million, the annual report of the Comptroller and Auditor General, John Purcell, has said.
It also revealed that a total of 3,872 audits in a special examination of the construction sector yielded €116 million, while 45,423 assurance checks in the sector yielded €21 million.
"Included in these assurance checks were 1,615 site visits, which identified 1,188 individuals who were not registered with Revenue, 447 subcontractors who were reclassified as employees and 2,479 additional VAT or employer registrations," the report said. "Fifty-five cases were identified for possible prosecution activity."
Noting that 81 serious tax evasion cases were on Revenue's hands this year, the report said special investigations by the tax authority had yielded a total of €2.33 billion up to May.
The highest yield was from offshore assets (€830 million) and the second-highest was from life assurance products (€430 million). Citing information received from assurance companies, the report said 5,300 inquiry letters were issued to customers in March 2007 and further letters were to be issued this month.
Mr Purcell said 18 tax cases are under investigation due to disclosures at the Moriarty tribunal. Three cases were settled for a total of €7 million and payments on account of €1.4 million were received in two cases. Another 27 cases are under investigation as a result of the Mahon tribunal, four of which have been settled for €26.5 million. Payments on account of €5.5 million were received in 12 cases.
"The Moriarty tribunal is nearing completion and it is not expected that further cases will arise. Revenue does not know if any additional cases will arise from the Mahon tribunal."
The yield from Revenue's audit scheme rose to €691.8 million in 2006 from €575.4 million, but the number of audits declined to 13,626 from 14,214. The number of assurance checks rose to 176,064 from 98,981.
The report also revealed that rent supplement payments totalling €197.47 million in 2005 were not matched to landlords' taxpayer records. "This amounts to approximately 56 per cent in monetary terms," Mr Purcell said.
Stating that Revenue was putting in place a project to examine the best means to deal with "unmatched cases", he said the requirement on public bodies to request tax reference numbers from landlords was introduced only in the 2007 Finance Act.
Mr Purcell dealt with two alcohol duty fraud cases in 2003, stating that proposals to improve the alcohol tax warehouse system will require a change in the law. "The owner of the goods will be required to formally register with Revenue and will normally be restricted to storing goods to be released for home consumption."
Comptroller and Auditor General's report: what is it?
Comptroller and Auditor General John Purcell is the Government spending watchdog. Appointed to the position in November 1994, his role is to ensure that public money is properly administered and spent to good effect. Mr Purcell is an independent officer under the Constitution with responsibility for the audit of public funds.
He reports directly to Dáil Éireann. His annual report identifies issues across departments that need to be brought to public attention "in the interests of transparency and accountability". As well as the annual report, he publishes value-for-money and special reports throughout the year.
In the coming months, the Dáil Public Accounts Committee will call in the heads of departments to discuss Mr Purcell's report.The full text of the Comptroller and Auditor General's 2006 report and the audited accounts are available on the website http://www.audgen.gov.ie
