The chairman of the Revenue Commissioners, Mr Dermot Quigley, has again promised to relentlessly pursue and punish tax evaders, following publication of his organisation's annual report. Unfortunately, the reality does not live up to the rhetoric.
Last year, Revenue audits yielded just under £310m in an examination of 18,000 cases. It recovered £24m from investors in an off-shore National Irish Bank scheme and is at present investigating 13 individuals with a view to possible prosecution. The number of individuals, companies and trusts being investigated in relation to Ansbacher offshore accounts has also grown to 500. In spite of all this activity, there were only three successful prosecutions for major tax fraud last year, with two of those resulting in people being jailed.
The aim of the Revenue to enhance public confidence in the tax administration system, following recent disclosures at the Moriarty tribunal and an Oireachtas committee concerning bogus offshore accounts, DIRT tax evasion and other matters, is still a long way from realisation. Its decision to offer a partial amnesty to an estimated 50,000 holders of bogus off-shore accounts who make a voluntary declaration of their liabilities before November 15th next, was a retrograde step.
But some positive measures are being taken. A prosecutions division will be established later this year to increase the number of indictments in serious tax fraud cases and it is scheduled to be fully operational by 2002. The Revenue will also conduct a study and report by 2003 on whether it is possible to assess the likely level of tax evasion in our society.
In spite of such initiatives and aspirations, the language used by the Revenue does not impress. By referring to the "black economy" - a term immediately recognisable to the general public - as the "shadow economy", when it speaks of measuring the extent of tax fraud and evasion in our society, it seems to imply a grey area. What is wrong in calling a spade a spade?
If the Revenue desires to make amends for past failures and restore public confidence in its willingness to tackle tax evasion at the highest level, it will have to act tough, not just talk tough. Its recognition that the behaviour of financial institutions and high net worth individuals shows "there are no social or economic boundaries to tax evasion" is an advance. Over the past number of years, the Revenue has been given extensive new powers by the Government. It is time for it to use them.