As regards representations, it is the policy in my Department that, when any such communication is received, its contents are noted and details circulated to the relevant officials, and to the Revenue Commissioners, as appropriate. A response is then prepared and issued. The Revenue Commissioners 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.
The Revenue Commissioners are pursuing a programme that is dealing in a very determined way with tax evasion in all its forms 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 prearranged aspect queries on specific items. In addition, joint operations are conducted with the Department of Social Protection using Joint Investigation Units and there is a strong focus on cash businesses, given its potential high-risk nature.
In 2012, Revenue carried out more than 537,000 compliance interventions, yielding more than €492 million. Considerable success has been achieved in combating the illegal trade in tobacco products. In 2012, Revenue’s Customs Service seized a total of 95.6 million cigarettes from 8,108 seizures. A further 5,276 kilograms of other tobacco products were taken in 2012 from 1,395 seizures. There were 22 convictions on indictment, and 110 summary convictions, during the year for offences related to the smuggling or sale of illicit cigarettes and tobacco.
In addition to the on-going enforcement action against the illegal fuel trade, steps are being taken to ensure enhanced control and supervision at all stages of the fuel supply chain. Key actions include a strengthening of the licensing arrangements for businesses selling auto-fuel, and of the enforcement of licensing requirements. In addition, new licensing requirements have been applied to persons dealing in marked fuels, with effect from 1 October 2012. As well as these important licensing changes, a requirement operates from 1 January 2013 for all fuel traders to make electronic monthly returns to Revenue on their fuel transactions. This will facilitate Revenue in detecting unusual or anomalous patterns of activity.
Given the links of organised criminality with the illegal fuel trade, Revenue works closely with An Garda Síochána in combating it. Searches undertaken as part of intelligence-led operations have resulted in a considerable number of seizures of diesel and the closure of laundering plants, particularly in border counties. In 2012, 11 oil laundries were detected and shut down and 199,000 litres of oil were seized along with 27 vehicles, 2 fork-lifts and 5 trailers. There were 10 arrests in the course of these operations. 57 premises were closed in 2012. In addition to the fuel seized at laundries, a further 902,087 litre of fuel were seized during the year, the greater part from retail outlets or in the course of delivery to them.
Much of the focus of the Joint Investigation Units (JIUs) is on shadow economy activity and their operations include targeting illegal traders at markets and at seasonal events (Christmas fairs, outdoor concerts etc.). During 2012, over 3,000 outdoor checks/visits/inspections were carried out by the JIU teams including 168 multi-agency operations. The Revenue Commissioners hold regular meetings with trade and representative bodies through The Hidden Economy Monitoring Group where the risks posed by shadow economy activities are discussed. The most recent meeting took place on January 30th.
Changes are frequently made in tax legislation aimed at counteracting shadow economy activity. Two examples from 2012 include the introduction of the electronic Relevant Contracts Tax regime and an enhanced penalty regime for employers who fail to operate PAYE regulations fully. If any members of a Council wish to bring specific information on shadow economy activity to the attention of the Revenue Commissioners, they may contact Planning Division, Bishop’s Square, Redmond’s Hill, Dublin 2, or at the direct line (01) 4244276.