The chairman of the Revenue Commissioners, Mr Cathal Mac Domhnaill, was cross-examined closely at yesterday's meeting of the Committee of Public Accounts. Mr Jim Mitchell, TD, wanted to know why there had been no "Lester Piggott-style" tax cases in the Republic. He spoke of a general concern among PAYE workers that the Revenue Commissioners did not pursue white-collar tax defaulters with sufficient vigour.
The meeting of the committee conformed to a recent trend; after years in which it operated in secrecy without any public comment, the Revenue's performance is now under much closer scrutiny. In his recent report, the Comptroller and Auditor General, Mr John Purcell, criticised the Revenue for failing to employ the vast array of enforcement measures at its disposal. His report found that the commissioners only expect to recoup about one-third of the £1,690 million due in outstanding tax arrears. Last month, the President of the High Court criticised the Revenue for allowing companies to incur substantial tax debts before initiating proceedings for payment. He said that the Revenue was leaving the collection of debts "much too late".
Most of all, the revelations of widespread tax irregularities in the course of the McCracken tribunal has served to undermine public confidence in the efficiency of the Revenue. It is now clear that huge amounts of money were sloshing around in unorthodox payments and in off-shore accounts without any form of investigation by the Revenue.
The forthcoming Moriarty tribunal will examine "whether the Revenue Commissioners availed fully, properly and in a timely manner in exercising the powers available to them in collecting or seeking to collect the taxation due by Mr Michael Lowry and Mr Charles Haughey..". The tribunal will provide a unique opportunity for the public to examine the modus operandi of the Revenue Commissioners; from what is known it seems unlikely that the Revenue will emerge from the tribunal with any great credit. The irony is that the Revenue is probably more effective now than at any time in its history. More streamlined operations, better intelligence gathering methods and tougher penalties have all helped to improve compliance with the tax laws. The total of outstanding taxes has fallen from £3.5 billion in 1995 to £1.69 billion this year. The outstanding debt now represents just 15 per cent of annual total taxes, compared to 57 per cent in 1989. The Revenue is making progress. It may need additional powers and more resources to do a still better job. But it seems that compliance with the tax laws will only become a matter of course in this State when some form of custodial term is imposed on a persistent offender. That kind of punishment has helped to concentrate minds in Britain. It would unquestionably have the same effect here - where a golden circle continues to adopt a freewheeling approach towards its tax affairs.