The annual report of the Revenue Commissioners contains a revealing overview of tax collection in the State. Gross tax receipts last year topped £18 billion, well ahead of the Budget target, reflecting both the buoyancy of the economy and the increased efficiency of the Revenue's collection system. There can now be no doubt that the self-assessment system introduced in recent years has led to a substantial improvement in tax collection, or that the Revenue is now starting to take a tougher line with major defaulters.
Launching the report yesterday, the chairman of the Revenue Commissioners, Mr Dermot Quigley, said that the tax authorities were sparing no effort in following up the findings of the McCracken Tribunal report. They have also taken an active approach to the revelations that insurance bonds sold by National Irish Bank may have been used as a vehicle to evade tax. Significant sums of unpaid tax continue to be collected through the Revenue's audit and other enforcement programmes.
Meanwhile, 21 cases of serious tax evasion are now being pursued for criminal prosecution, although it remains to be seen what the outcome of this process will be. Only one custodial sentence - a two-year suspended sentence - has to date been imposed in Ireland for income tax evasion. As Mr Quigley acknowledges, the burden of proof on the prosecution in these cases is high.
The Revenue has done much in recent years to reform its operations, improve its procedures and make itself more customer-friendly. However it is now facing further challenges in what is a crucial period in its history.
The various scandals unearthed in recent years have again raised questions about the tax system and whether everyone pays their fair share. In particular, reports of hundreds of millions of pounds deposited in various offshore accounts have led many in the PAYE sector to ask whether there was one rule for them and another for a large number of wealthy people. Many of the recent revelations relate to events of some years ago. And the Revenue Commissioners are by no means fully responsible for what happened - many others must also share the blame. The governments which introduced the 1986 and 1993 tax amnesties, for example, must have been aware of the impact these would have on people's attitude to the tax system and their view of the benefits of compliance.
There are, however, legitimate questions about the way the Revenue dealt with some of the issues at the time, some of which will be covered by the Moriarty Tribunal. The success with which the tax authorities now pursue the matters brought to light over the past couple of years is crucial in restoring public confidence in the fairness of the system.
The Revenue has already gone a long way to develop a fair and equitable system of tax collection. However, it remains to be seen whether its powers are sufficient to fully investigate the matters brought to light and whether existing legislation will ensure that appropriate punishment is handed down.