Revenue's arrangements for collecting tax from landlords who receive payments from the State are "haphazard and inefficient", a Dáil committee was told yesterday.
Comptroller and Auditor General John Purcell told the public accounts committee that it would take a "concerted effort" by Revenue to effect an improvement.
Revenue Commissioners chairman Frank Daly confirmed to the committee that officials did not know if tax was paid on some €200 million paid by the State to landlords last year.
Mr Daly said legislation which allowed landlords to receive rent supplement payments without supplying PPS numbers was "fundamentally flawed" and Revenue officials have had to work around it.
He said the Revenue Commissioners were only able to match up 42 per cent of the money paid out by the Department of Social and Family Affairs through the rent supplement payments with their own register in 2006.
However, he stressed there would be a "quantum leap" in detection for payments made this year because of changes in the 2007 Finance Bill which makes it compulsory for landlords to supply their PPS numbers before they can receive rent supplement payments.
Mr Purcell's report revealed that the Revenue Commissioners could not directly match up €197 million of the €368 million which was paid out in rent supplement payments through the Department of Social and Family Affairs in 2005. It amounted to more than 52,000 of the 91,733 payments made through the scheme that year.
The comptroller also highlighted difficulties in the payments through the rental accommodation scheme which is administered by the Department of the Environment, and the fact that a close examination had revealed that payments of rent supplements were being made to non-resident landlords without deduction at the standard rate of tax as required by law.
Committee chairman Bernard Allen of Fine Gael said the committee was not happy with the situation that exists with regard to the payments of landlords by State bodies.
The committee did not pass the section of the report dealing with such payments and intend to summon officials from the Department of Social and Family Affairs, the Department of the Environment and the Private Residential Tenancies Board to discuss tax compliance in the residential sector.
Labour TD Róisín Shortall accused the Revenue of "being soft on landlords" and of not taking the issue seriously.
"More than half of the landlords receiving rent supplement through the Department of Social and Family Affairs are getting away with it, it seems. You have no way of tracing that. You can't match that State money being paid out to landlords. You can't match that with the taxpayers or individual companies," she said.
Mr Daly said there was now a team within the Revenue Commissioners who were working on matching up payments and they were looking at examining all of those who had been in receipt of the payment.
