I am advised by the Revenue Commissioners that all developed countries operate some form of self-assessment system for their business taxpayers. The Irish self-assessment system ensures that there are tight controls in place for tax return filing rates which are borne out by the timely filing rates of 98% for large cases, 95% for medium cases and 80% for all other cases, across all taxes. This strategy is supported by a comprehensive compliance programme of audits, risk management interventions, special investigations and prosecutions. I am further advised that, as Self-Assessment for income tax was introduced in 1988 and for corporation tax in 1989 and as the data is not maintained in a suitable format, it is not possible to provide all the details sought by the Deputy without an extensive examination of Revenue records. However, they have supplied me with the Tables below, which give comprehensive data for seven years from 2006 to 2012. The various interventions shown are not confined to direct taxes, and would include VAT, Excise etc. where relevant.
|
Type of Intervention
|
Numbers Completed and Yield
|
Numbers Completed
and Yield
|
Numbers Completed and Yield
|
|
-
|
(€m)
|
(€m)
|
(€m)
|
|
-
|
2008
|
2007
|
2006
|
|
Comprehensive (All taxhead)
|
3,904 (262)
|
3,875 (344.5)
|
4,127 (436.2)
|
|
Single Tax/Duty Audits
|
6,082 (184)
|
6,603 (151.6)
|
6,305 (133.5)
|
|
Multi Tax/ Duty Audits
|
2,065 (65)
|
2,206 (71.2)
|
1,757 (56.2)
|
|
Single Issue/Transaction Audits
|
1,363 (59)
|
1,624 (120.3)
|
1,437 (23.8)
|
|
Total Audits
|
13,414 (570)
|
14,308 (687.6)
|
13,626 (649.7)
|
|
Assurance Checks
|
345,452 (63)
|
237,626 (46.2)
|
176,064 (42.1)
|
|
Total Interventions
|
358,866 (633)
|
251,934 (733.8)
|
189,690 (691.8)
|
|
Type of Intervention
|
Completed 2011
|
Yield
|
Completed 2010
|
Yield
|
Completed 2009
|
Yield
|
|
-
|
-
|
€m
|
-
|
€m
|
-
|
€m
|
|
Comprehensive (All taxheads)
|
4,717
|
183.6
|
4,209
|
197.1
|
4,353
|
279
|
|
Multi Tax/Duty Audits
|
1,236
|
61.6
|
1,374
|
53.6
|
1,735
|
63
|
|
Single Tax/Duty Audits
|
3,345
|
126.9
|
3,841
|
111.6
|
5,053
|
163
|
|
Single Issue/Transaction Audits
|
1,768
|
68.4
|
1,584
|
72.4
|
1,278
|
97
|
|
Total Audit Interventions
|
11,066
|
440.5
|
11,088
|
434.7
|
12,419
|
602
|
|
Assurance Checks
|
546,502
|
81.3
|
454,796
|
58.0
|
361,480
|
66
|
|
Total Interventions (Audit & Assurance)
|
557,568
|
521.8
|
465,804
|
492.7
|
373,899
|
668
|
2012
|
Audit Interventions
|
Completed 2012
|
Yield 2012
|
|
-
|
-
|
€m
|
|
Comprehensive (All taxheads)
|
4,687
|
181.8
|
|
Multi Tax/Duty Audits
|
985
|
34.7
|
|
Single Tax/Duty Audits
|
2,624
|
99.7
|
|
Single Issue/Transaction Audits
|
769
|
42.9
|
|
PAYE Compliance Interventions
|
29,881
|
23.2
|
|
Risk Management Interventions
|
125,073
|
87.7
|
|
Assurance Checks
|
373,803
|
22.4
|
|
Total Compliance Interventions (Audit, Risk & Assurance)
|
537,822
|
492.4
|
The Commissioners also advise that these figures, year-on-year, are not directly comparable due to a re-labelling of compliance interventions and the continuing evolution of their compliance programmes to reflect changes in the economy and the efficient use of resources. Not all Revenue interventions take the form of formal audits or investigations and in accordance with their risk-based approach cases are selected for intervention based on the presence of various risk indicators. Each Revenue intervention is intended to be in the form which is most efficient in terms of time and resources, and which imposes the least cost on the taxpayer, whilst addressing the perceived risk and consequently Revenue carry out Risk Management Interventions, which take the form of Aspect Queries and Profile Interviews.
Revenue's objective in case working is to ensure that each case (taxpayer or business) is fully compliant with their legal obligations in relation to the keeping of proper books and records, the timely and accurate submission of required declarations and the prompt payment of tax and duty liabilities. This approach ensures that, as far as possible, the self-assessment system operates effectively and minimises instances of fraud or mistake.
The selection of cases in which to intervene is a critical step in Revenue’s compliance programme and case selection derives from a variety of sources. In addition to specific projects like the shadow economy project, Revenue also uses extensive third party data, good citizen’s reports and other intelligence to drive its compliance interventions. In the past two years, Revenue has also been using advanced analytics to help it identify indicators of fraud or error from taxpayer’s filings and they are regarded as a leading tax administration in the deployment of these technologies.
I am also informed that a major focus of Revenue’s activities in relation to self-assessed cash businesses is to tackle shadow economy activities including the suppression of sales, wages and income by registered businesses and fraudulent repayment claims. It is a multi-faceted issue that requires a co-ordinated and varied response.
Revenue tackles the problem of the shadow economy through its range of compliance and audit interventions including through targeted special projects. Case interventions are undertaken based on Revenue’s assessment of compliance risks, the level of those risks and other relevant information available. Revenue is using a wide range of methodologies to identify those operating in the shadow economy and is deploying the full range of compliance interventions.
The Deputy will be aware of the continuing strengthening of legislation to provide for a robust framework within which the Revenue Commissioners may tackle tax evasion, including recent provisions relating to the making of returns of transactions by merchant acquirers, and other payment settlement organisations, to the Revenue Commissioners and Regulations, introduced in 2011, requiring Government Departments and State Bodies to supply details to the Revenue Commissioners of payments made.
Revenue investigations have also detected the use of computer programmes or electronic devices to alter or conceal sales records. To counteract these risks, legislation was also enacted in 2011 providing penalties for the possession, use or supply of automated sales suppression devices known as "zappers" for the purpose of evading tax.
I am advised by the Revenue Commissioners that the results from all the various projects undertaken by Revenue are reflected in the general audit and compliance results from audits, assurance checks, and other risk management intervention which are published in Revenue’s Annual Report. The high level of success in securing settlements is a reflection of the targeted approach used by Revenue which is to focus its compliance resources on the areas of greatest risk. An associated strategy is to minimise the number of contacts with compliant taxpayers.
I am confident that the Revenue Commissioners have a very clear focus to target and confront those who do not comply, as set out in their Statement of Strategy for 2011 to 2013.
