Mary Mitchell O'Connor
Question:95. Deputy Mary Mitchell O'Connor asked the Minister for Finance the actions he has taken to stop persons working in the black economy; and if he will make a statement on the matter. [45442/12]
View answerThursday, 18 October 2012
Questions (95, 97, 98)
Mary Mitchell O'Connor
Question:97. Deputy Mary Mitchell O'Connor asked the Minister for Finance the amount of money lost to the State each year due to the black economy; and if he will make a statement on the matter. [45444/12]
View answerMary Mitchell O'Connor
Question:98. Deputy Mary Mitchell O'Connor asked the Minister for Finance the amount of money he has saved by taking a tough stance on persons working in the black economy; and if he will make a statement on the matter. [45445/12]
View answerWritten answers
I propose to take Questions Nos. 95, 97 and 98 together.
I am advised by the Revenue Commissioners that they are very mindful of the unfair competitive advantage to be gained by those businesses that do not fulfil their tax obligations. Revenue’s tax and duty compliance programmes are under constant review to ensure that they are focussed on the areas of greatest risk, including risks from the shadow economy.
I am further advised that Revenue tackles the problem of people working in the shadow economy through a range of compliance and audit interventions including targeted special projects. A variety of methodologies are used by Revenue to identify those who are operating in the shadow economy including covert surveillance, cold calls to businesses and venues as well as pre-arranged aspect queries on specific items. In addition, joint operations are conducted with the Department of Social Protection using Joint Investigation Units.
Revenue also has a particular focus on tackling evasion of taxes and duties in the oil and tobacco sectors. In 2012 to date nine oil laundries have been detected, thirty-eight filling stations have been closed down and over one hundred and fifty-six thousand litres of fuel have been seized from oil laundries. During 2011 Revenue’s Customs Service seized a total of 109 million cigarettes in 10,581 seizures. Commercial quantities in maritime freight traffic accounted for 76.4 million cigarettes. Revenue also seized 11,158kg of tobacco in 2011.
Regarding the amount of money lost to the State each year due to the shadow economy, I am informed by the Revenue Commissioners that given the nature of the shadow economy there is no reliable system to measure the tax lost.
I am confident that the Revenue Commissioners are pursuing a programme, which is dealing in a very determined way with tax evasion in all its forms. For the year 2011, the Revenue Commissioners secured €440m in additional yield through their audit programmes. This additional yield includes a significant amount in respect of interest and penalties. In addition, through its programme of assurance checks for 2011, the Commissioners secured additional yield of €81m.
I am advised by the Revenue Commissioners that they have a prioritised focus on those sectors that traditionally have been susceptible to shadow activity such as cash businesses. The following is a summary of the audit results for the year 2011 for a number of sectors:
- Specific hospitality businesses (bars and restaurants) - 613 audits - Yield €16.9m
- Professionals (White Collar) – 543 audits - €14.5m yield
- Rental – 908 audits - €35.1m yield.
The Deputy should also note that changes are frequently made in tax legislation aimed at counteracting the shadow economy. Two notable examples are the introduction of the electronic Relevant Contracts Tax regime and an enhanced penalties regime for employers who fail to operate the PAYE regulations fully, both of which came into operation during 2012.