Before answering the Deputy's question, I want to give the House necessary background information. The changeover from the old system to self-assessment is a major management challenge. To ensure that this changeover takes place in an orderly manner, the two systems must run in tandem for a number of years. As the volume of work under the old system diminishes, staff can be released to operate the new system.
I must stress that it is not a necessary condition of the success of the self-assessment system that a full audit system be in place from day 1. Inspectors of taxes have a six-year period during which cases remain open and cases chosen for audit in any year are liable to be audited for the preceding five years. Against this background, I am satisfied that the transition to the new self-assessment system is progressing satisfactorily, including the implementation of the audit programme.
So far, it has been possible to release 532 Revenue staff to the administration of the self-assessment system. Of these, 45 are inspectors who are engaged directly in self-assessment audit work. It is expected that this number will be increased to 100 inspectors of taxes over the course of 1991, with further deployment of personnel into the audit area during 1992 and subsequent years.
Up to now the audit function has been confined to income tax returns only. A corporation tax audit unit was established at the end of 1990 and audits will commence shortly.
The audit of income tax returns, to which the Deputy is referring, is, of course, only one dimension of the total Revenue audit capacity. There are also separate audit programmes covering employer's PAYE, value-added tax and construction industry tax. The total audit programme last year involved 241 officers and entailed some 26,000 visits and resulted in an impact on 9 per cent of the taxpayer base of 270,000 (including companies). This is very high by international standards.
In addition, a further 28,000 compliance visits (covering such items as tax payments and non-filing of various returns) were made by officers of the Revenue Commissioners, bringing the total between audit and compliance visits to approximately 19 per cent of the taxpayer base.
The level of self-assessment audits should be such as to ensure compliance by and confidence of taxpayers in the system. Bearing in mind the level of audit coverage already available and the additional resources being freed for audit work over the coming years, the Revenue Commissioners are satisfied that they have adequate resources to put in place an effective audit programme as part of the self-assessment system.