Impact executive member, Ms Mary Farrell, yesterday called for the powers of the Revenue to be increased and brought into line with those of other EU countries. In spite of a special non-prosecution deal offered to bogus DIRT account holders by the Revenue Commissioners last year, she said that only 6,500 had come forward out of an estimated 50,000. Recovering these due taxes would require tough decisions, she said, because they were directed at the holders of capital assets.
Tax evasion hasn't gone away, you know. The latest estimate of the size of the Irish black economy by European economics expert, Professor Friedrich Schneider, has put it at 15.5 per cent, worth an estimated €19.2 billion. Some 11 per cent of the workforce may be involved and the estimated tax loss to the Exchequer has been put at € 2.5 billion. On top of that, there are tax-evasion scams involving individuals in the normal economy. Small wonder then, that the Association of Tax Inspectors should complain through their trade union, IMPACT, about a lack of vigour in pursuing tax fraud.
Two years ago, complaints about "planned, systematic and widespread tax evasion" were being made by much the same people. And the upshot was that a cap on employment within the Revenue Commissioners - that had existed since 1991 to save on administrative costs - was removed by the Minister for Finance, Mr McCreevy. Extra members of staff were employed. And, in response to public outrage over the widespread evasion of DIRT tax through bogus, offshore accounts, new powers were given to the Revenue. Where tax evasion was identified, inspectors were permitted, on the signature of a Revenue Commissioner, to seek information about other accounts held by that particular individual. Or they could apply to the High Court for an investigation order for a particular type of account. But they were not allowed to engage in a general trawl of citizens' accounts without prior evidence of wrongdoing.
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The Minister for Finance has shown determination in the past. And, in present circumstances, where revenue has fallen well short of expectations while spending has increased, the incoming government may adopt a tough stance. Cracking down on tax fraud in order to raise revenue should certainly take precedence over spending cutbacks or tax increases.