The Revenue Commissioners has recommended a review of the limited liability provisions that apply to company directors in a bid to tackle tax evasion.

Chairman, Mr Frank Daly, told the Dáil Committee of Public Accounts that limited liability, which protects directors from losing their personal assets to repay company debts, assists tax evasion.

A possible change to this structure is one of six proposals the Revenue has made to the Department of Finance that it hopes will be included in future legislation.

It has suggested that the limited liability provisions should only be relaxed to make persons controlling companies responsible for unpaid taxes, such as VAT or PRSI, which should have been held in trust for the Revenue. This would apply only if the directors had a history of default and is applied in the US, according to Mr Daly.

"There would need to be consultation with the business community, the Department of Enterprise Trade and Employment, the Department of Finance, the Attorney General and the Company Law Reform Group."

He added that the Revenue was very conscious of the value of limited liability to the development of an entrepreneurial culture.

It also has proposed changes to the issuance of excise licences. The Revenue is trying to ensure that the awarding of these licences would be dependent on the tax compliance of each of the businesses operated in the premises and not just the person who held the licence.

The Revenue also wants the penalties for trading without an excise licence raised from €1,265 to €3,000 and the power to seize stock and to close premises.

A change to the VAT act would also help to close off tax evasion in the property development industry. Mr Daly estimated that up to €10 million could have been lost through the withholding of VAT payments as a result of property sales by developers.

Revenue also wants to attach some pre-conditions when repaying VAT to property developers.