In many respects, the annual report of the Revenue Commissioners for 1996 could hardly be more encouraging. It tends to confirm - not only the robust state of the economy - but also the general public perception that the Revenue is becoming more effective in doing its job. The upsurge in tax receipts is quite remarkable. Net receipts totalled over £12 billion, an increase of over
£1.2 billion on 1995. In all, income tax receipts are up by almost 11
per cent, VAT receipts by almost 12 per cent and - reflecting the property boom
- receipts from stamp duty have increased by 25 per cent.
The Revenue deserves credit for these record levels. More streamlined operations, better intelligence-gathering methods and tougher penalties have all helped to improve compliance with the tax laws. The establishment of the new
Prosecution Policy Unit with officers trained in criminal investigation and evidential requirements is an especially welcome step. Despite the Revenue's best efforts, however, there is still a perception that this State is unduly lax with those who refuse to deal with their taxation requirements - certainly in comparison with our nearest neighbour where high profile business and sporting figures have been despatched to prison for tax irregularities. The same kind of medicine might help to concentrate minds in this country. It might also help alleviate the burning sense of grievance among many in the PAYE sector that they are being forced to shoulder an excessive tax burden.
Despite the very best efforts of the Revenue, few would deny that there is still considerable tax evasion by some wealthy individuals and a booming black economy. The revelations at the McCracken Tribunal will hardly help to build public confidence in the tax system. Reports of monies sloshing around in secret off-shore accounts and the painstaking efforts made to conceal them, will only confirm public cynicism about the existence of a 'golden circle' in Irish society, which can adopt a freewheeling approach towards the tax system. To his credit, the Chairman of the Revenue, Mr Catal Mac Domnaill, stressed yesterday that matters raised at the Tribunal would be pursued without fear or favour by the Commissioners. But there is a clear sense that the stable door is being closed after the horse has bolted. The public is entitled to ask why the Revenue was not, apparently, in a position to gather the kind of damning evidence that was heard at the tribunal?
The Revenue, in fairness, should hardly be blamed for the abuses that have come to light at the tribunal. It may be that it needs additional powers and more resources to track offshore and other unorthodox payments. Indeed, this is one of the issues that might usefully be explored by Mr Justice McCracken in his report on the tribunal.