Revenue increases tax collection by 9.3% in 2014

The Revenue Commissioners increased its tax collection by 9.3 per cent in 2014, as it benefited from “high levels of timely payment and compliance rates” to collect some €41.4 billion in taxes.

Income tax was up by 8.8 per cent at €19bn; corporation and VAT up by 8.1 per cent to €5.3bn and €14.2bn respectively; and stamp duty up by 26 per cent to €1.7bn, the Revenue said.

The Revenue conducted over 437,000 compliance interventions during the year, yielding over €610m, up by 11 per cent on 2013. The greatest yield was seen in the construction sector, with 889 audits returning over €35m, while efforts to target landlords resulted in 539 audits and a yield of more than €22m.

Revenue chairman Niall Cody said that projects such as the National Contractors Project, which has now yielded €19m, and the Medical Consultants Project (nearly €16m), would continue to run.

On the construction side, Mr Cody pointed to the introduction of the Home Renovation Incentive scheme, which allows homeowners to claim a rebate on VAT on home renovations.

“At this point, over 20,000 qualifying works with a value in excess of €385m have been recorded on the system by over 4,700 contractors,” he said, adding that the Revenue is watching construction closely as the economy takes off, “ensuring that bad practices don’t develop”.

The Revenue also published figures on its Local Property Tax collection efforts, noting that a compliance rate of 96 per cent was achieved in 2014,with €454m collected, and so far in 2015, the campaign is “ahead of target” with a rate of 94 per cent already achieved.

Tax evasion

The Revenue continued its clampdown on illegal fuel during the year, noting that since mid-2011, “134 filling stations have been closed, over three million litres of fuel have been seized and 31 oil laundries have been detected and closed down.”

While Mr Cody noted that it was “impossible” to estimate how much the exchequer was losing out on as a result of illegal fuel, he said that developments such as a new additional marker to mark rebated fuel, will make it more difficult for launderers to operate.

Phased payments

At the peak of the crash, the number of taxpayers opting for phased payment arrangements, whereby payment of outstanding tax could be spread out, stood at about 16,000. However Mr Cody said on Wednesday that this has since shrunk to about 8,900, covering €104m in debt.

“It shows that people who entered into it three years ago are coming out the other end,” Mr Cody said.

Outstanding debt has also shrunk, down by 10 per cent on 2013, with some €907m now in debt for collection, the lowest “in any year”.

The Revenue’s enforcement programme collected nearly €220m, and the recovery rate was up by 5 per cent.

Analytics

Analytics is seen a key enabler in the Revenue’s work, with Mr Cody noting that the Revenue is probably “the leader at exploiting data in the country”.

Indeed it helped Revenue increase the attention it paid PAYE employees during the year. It analysed 2.8m PAYE transactions, of which 10,721 were stopped for further examination. As a result of this, some 7,697 cases yielded €1.4m, up from 2,585 cases in 2013.

Tax avoidance

Commenting on the Revenue’s tax avoidance programme, Mr Cody said that taxpayers have an opportunity to make a full disclosure prior to June 30th, 2105. Doing so will mean that interest payments will be capped at 80 per cent.

While Mr Cody noted that “a few million euro” had been received as a result of settlements to date, significant settlements are unlikely to be reached ahead of the deadline.

“Taxpayers who choose not to avail of the settlement opportunity should note that we will actively challenge tax avoidance transactions and litigate such cases in the Courts,”Mr Cody said.

Recruitment drive

The Revenue will grow its headcount for the first time this year since the introduction of the public sector recruitment embargo, and is currently recruiting for 400 roles. Given that its employment figures are currently at a level seen in 1975, at about 5,700 employees, the move has been welcomed. However, Mr Cody said that about 200 of these new positions will simply replace Revenue staff who are due to retire.