AT A TIME of rapidly falling Government revenues, an estimate by Comptroller Auditor General John Buckley that up to 30 per cent of self-employed taxpayers under-declare the amount of money they owe to the Revenue Commissioners should concentrate ministerial minds.
In the same vein, up to 60 per cent of those taxpayers who were found to be non-compliant in the past are likely to continue with their bad old habits.
Taoiseach Brian Cowen has spoken of a need to share pain across society in dealing with current economic difficulties. And there is no doubt that social solidarity will form a vital ingredient in making complex adjustments to new realities. In such circumstances, demanding that citizens pay their due taxes would seem to be a minimum requirement. Only the most brazen offenders face jail and in those rare cases where prosecutions are taken, the courts tend to impose suspended sentences.
Mr Buckley reports that the Revenue Commissioners collected a total of €2.4 billion from a series of special investigations involving Dirt payments, bogus off-shore accounts, insurance scams and Ansbacher accounts in recent years. Of the thousands of people involved in these and other illegal tax evasion schemes, there were nine court convictions last year. Nobody went to jail. The contrast between the treatment of these people and those who defrauded the social welfare system is stark: more than 200 welfare fraud cases went to court last year and 12 people were imprisoned.
Imposing tough penalties and interest charges on major tax offenders and publishing their names certainly causes social embarrassment. But there is no evidence to show it prevents recidivism. In fact, as the CAG points out in his report, re-audits showed that nearly two-thirds of offenders detected before 2002 were still non-compliant four years later. No re-audit programme has been undertaken by Revenue for the past six years. It would seem that staff members were fully engaged in special investigations. Nearly 4,000 comprehensive audits yielded €344 million last year. The construction industry returned €152 million.
Other aspects of the report also require Government attention, such as the manner in which official vehicles are procured and assigned by the Garda Síochána and the way in which the Prison Service conducts its purchasing programmes. The cost of promoting a savings scheme was also criticised, as was the failure of some local authorities to spend flood relief money. There is a general need to tighten up the system.