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Dáil Éireann debate -
Wednesday, 14 Oct 1998

Vol. 495 No. 2

Written Answers. - Revenue Audit Programme.

Liz McManus


66 Ms McManus asked the Minister for Finance the steps, if any, it is intended to take to reverse the decline in audits undertaken by the Revenue Commissioners, highlighted in the Report of the Comptroller and Auditor General, in view of the significant success of these audits in recovering sums due; and if he will make a statement on the matter. [19604/98]

I am informed by the Revenue Commissioners that from 1996 there has been a gradual change in the revenue audit programme from quantitative to qualitative audits. Under this approach more complex issues are tackled in the comprehensive audit programme. In single taxhead cases more in-depth audits are conducted. The result is that cases are taking longer to complete and while fewer were audited in 1996 and 1997 than in previous years, the average yield in terms of tax, interest and penalties collected per case has increased significantly. For example the 1995 yield for comprehensive audits averaged £13,085 per case while the 1997 yield was £16,533 per case. The average yield per case in 1998 for comprehensive audits so far is in the region of £20,000. In the case of VAT, the 1995 yield was £3,603 per case while the 1997 yield was £5,001 per case.

In late 1997, a problem was recognised to be emerging in the operation of RCT/PAYE in the construction industry. Rather than allowing the problem to develop and become potentially insurmountable, Revenue decided to tackle the matter immediately by assigning a number of auditors to a special project to ensure appropriate tax compliance. A total of 423 principal contractors were visited under the project in the period to December 1997. As the focus of attention was confined to an examination of tax matters rather than an examination of the books and records of taxpayers, the visits did not fall be included in the counts of audits conducted. The project has had an impact on the number of audits completed in 1997.

There is a considerable variation in the amount of time normally required to complete various kinds of audit and investigations. For example, the completion of a very large and complex case might require the application of two officers over a period of six months or more. In contrast, a relatively simple audit of VAT returns might be competed in one day. The overall number of audits and investigations in a year will naturally reflect the volume and nature of cases arising and the requirements to give special attention in certain years to certain kinds of cases. Depending on the nature of these cases, the work carried out on them and overall compliance priorities, the number of audits undertaken will increase or decrease in comparison with previous years. However, I can assure the Deputy that the Revenue Commissioners are determined to maintain the impact of their overall audit programme.