Tax compliance rates fell only marginally in 2020, says Revenue

Rates of timely compliance with tax law fell only marginally in 2020 despite the "most extraordinary year" ushered in by the Covid-19 pandemic, the Revenue Commissioners said on Wednesday as it published its headline results for the year.

The Revenue said it wanted to “acknowledge and say thanks” for what it described as positive engagement by businesses, individual taxpayers and tax practitioners for ensuring that “a continued culture of strong voluntary compliance prevails” in its collection of some €56.2 billion in taxes and duties for the exchequer.

While audit and compliance interventions at a taxpayer’s premises have been suspended since March 2020, the Revenue has continued to make compliance interventions electronically via myEnquiries or by telephone.

During 2020, it completed more than 378,500 audit and compliance interventions yielding €484 million in unpaid taxes, interest and penalties. This compares to about 394,000 such interventions yielding €544.5 million in the previous year.

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The Revenue also secured 21 criminal convictions for serious tax evasion and fraud in 2020 and published 122 tax settlements in the list of tax defaulters. This compares to 15 criminal convictions and 214 published tax settlements the previous year.

Work tackling smuggling and other illegal activity also continued, with the seizure of more than 48 million cigarettes worth about €33 million and more than 4,600 kilos of drugs with an estimated value of €45 million.

"By any measure, the context in which Revenue publishes its headline results for 2020 is unprecedented in terms of disruption and uncertainty," said Revenue chairman Niall Cody.

As well as the headline exchequer figure, the Revenue also collected more than €15 billion on behalf of other departments, agencies and EU states. It also played a key role in the delivery of the Government’s Covid-19 supports to businesses.

Support payments

The first pandemic support scheme, known as the Temporary Wage Subsidy Scheme (TWSS), provided more than €2.8 billion in support to 66,600 employers in respect of more than 664,500 employees between March 26th and August 31st.

The Employment Wage Subsidy Scheme (EWSS), which replaced the TWSS from September 1st, saw some €1.4 billion was paid under the scheme to about 39,800 employers in respect of 443,100 employees.

By the end of the year, some 16,600 businesses registered for the Covid Restrictions Support Scheme (CRSS) introduced in Budget 2021 in respect of 19,000 premises. Total payments made under the scheme currently stand at €146 million.

Meanwhile, last year saw some 70,000 businesses availing of the Debt Warehousing Scheme, which permits Revenue to park certain tax debts that arose on foot of Covid-19, in respect of €1.9 billion of tax debt.

"We will continue to work closely with our colleagues in the Department of Finance during this time of economic uncertainty and play our part in administering and overseeing the relevant schemes and measures introduced by the Government in response to the pandemic," Mr Cody said.

Revenue Commissioner and director-general of customs Gerry Harrahill outlined the Revenue's preparations for Brexit, which saw the organisation write to 149,000 businesses with advice and further engage with 14,500 businesses via telephone.

Almost 77,000 businesses are now registered for customs with Revenue and have an Economic Operators’ Registration and Identification (EORI) system number.

Trade integrity

Mr Harrahill said the Revenue appreciated that the new reality of Brexit presented "significant challenges" for trade and imposed additional burdens on businesses. "But compliance is absolutely essential to ensure that Ireland fulfils its obligations as a member of the EU and that we protect the integrity of the single market and the customs union. This is vital for Irish business," he said.

“We will continue to support trade and business in adapting to the new customs formalities brought about by Brexit and as things bed down we will work with individual businesses to resolve specific matters.”