Revenue says it has 'turned a corner' on tax evasion

Tax officials are this year targeting evasion by barristers, jewellers and those in the security industry, Revenue Commissioners…

Tax officials are this year targeting evasion by barristers, jewellers and those in the security industry, Revenue Commissioners chairman Frank Daly announced as he published the agency's annual report.

A similar sectoral investigation into the construction industry last year netted €125 million in unpaid taxes.

Mr Daly said no sector was immune to scrutiny. However, he did acknowledge that people were becoming much more aware of their responsibilities regarding tax compliance.

"We have turned a corner as far as tax evasion is concerned, and it is important that we keep going in the right direction."

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He said there was no indication of any serious area of systematic fraud or evasion within the tax system, and Revenue was simply pursuing every sector in turn.

Sectoral investigations aim to quantify and address the extent of non-compliance in specific business sectors, according to Revenue.

Mr Daly said barristers, jewellers and security companies would be the targets this year.

A spokesman for Revenue said the focus on jewellers would start in the Wexford area and, depending on the outcome, a decision would be made on whether to extend it across the State.

Mr Daly said Revenue would also continue to look at rental income, and in particular where people got the money to purchase overseas properties.

He said there was no evidence to suggest a link between property and organised crime.

Apart from the construction sector, Revenue focused last year on hotels, restaurants, coffee shops, computer consultants, pubs and people with rental income.

Revenue said net receipts during the year amounted to €45.5 billion, €6 billion more than that recorded in 2005 and €3.7 billion above the Budget estimate.

The strongest performers were VAT and income tax, which between them accounted for 56.7 per cent of total revenues.

Stamp duty was also a significant contributor, netting almost €3.6 billion, 36 per cent more than in the prior year, and 35 per cent, or €947 million, ahead of the Budget estimate.

Mr Daly attributed the increase to the "exceptional" buoyancy of the property market last year.

He said the predicted slowdown in the housing market this year was not an issue for Revenue as this had been taken into account in the Budget estimates.

He said there had been no significant slowdown in income from stamp duty in the first three months of this year.

Special investigations yielded a total of €119.6 million last year, of which €88.3 million arose from specific investigations into the sale of single-premium insurance policies and offshore assets.

In addition, a further €34 million has been collected in the first four months of this year, bringing the overall yield from these investigations to €2.3 billion.

Mr Daly said the sectoral approach to tax compliance was proving very effective.

The focus on the construction sector, which last year took up 25 per cent of Revenue's national audit and compliance resources, would continue this year, though on a slightly smaller scale.

During the year Revenue visited 1,615 building sites, where 1,188 individuals who were not registered with Revenue were identified.A further 447 were reclassified from being sub-contractors to employees as a result of the investigation.

Martin Whelan, a spokesman for the Construction Industry Federation, said while the €125 million figure was significant, it was less than 1 per cent of the total tax contribution made by the sector.

According to the annual report,there were seven convictions for serious tax and duty evasion in 2006, and a further 515 convictions for summary offences.

In total there were 1,295 convictions for non-filing of tax returns.