THE Revenue Commissioners say there is no chance of collecting all of the almost £2 billion in unpaid taxes identified in the annual report of the Comptroller and Auditor General. Only about £500 million is collectible, the Revenue says. This would leave uncollected taxes of almost £1.5 billion.
The figure of £1.95 billion in outstanding taxes and levies set bout in the Comptroller's report "greatly exaggerates the amount of tax actually available for collection", the Revenue said last night.
In a statement, the Revenue insisted this was "very much a theoretical figure". It was unrealistic because most of it related to the time before self-assessment was introduced in 1989 when tax bills were based on assessments by the Revenue. In an unusual admission, the Revenue said these "tax assessments tended to be exaggerated and, on review, had to be reduced to a fraction of the estimates".
The £1.95 billion figure also included amounts owed by companies that have ceased trading and for taxpayers who have died or emigrated, the statement said.
Only about £5000 million of this was collectible, according to the Revenue. Every effort would be made to collect this and all necessary procedures would be taken.
Since 1989, intensive reviews and audits have reduced the figure for outstanding tax by £1.2 billion and £330 million of old arrears had been collected, the statement said. The tax collection system had been tightened up considerably in recent years, according to the Revenue. Recent buoyant tax returns reflected not only the strength of the economy but also a better performance by the Revenue in collecting tax.
The Revenue was reacting to the report that it expected to recover just £553 million out of unpaid taxes of £1.95 billion.
In his 1995 report, the Comptroller and Auditor General examined the performance of the Revenue Commissioners. On the basis of figures supplied by them, he compiled a table which showed unpaid taxes of £1.95 billion at the end of May. Only £553 million of this amount was likely to be collected, according to the report.
The report said income tax, including PAYE, was the largest category of unpaid taxes accounting for £720 million of the total outstanding of £1.95 billion.
VAT was the next category with £275 million outstanding. It was followed by Corporation Tax with £268 million owed to the Revenue.
Last year, the Revenue wrote off £81 million of taxes owed, including £35 million in VAT and £30 million in income tax. The main reasons given for the write-offs were companies going bankrupt or ceasing to trade, people who could not be traced or were outside the jurisdiction and "compassionate grounds".
The Comptroller, who examines the performance and financial controls in Government Departments and offices, was critical of a number of Departments, citing cost overruns on projects and moneys lost due to delays and inefficiencies.
The report will shortly go to a Dail committee. Department secretaries will give evidence to the Public Accounts Committee, which will then present a report to the Dail with recommendations on how control procedures should be tightened.
The Finance spokesmen for Fianna Fail and the Progressive Democrats - Mr Charlie McCreevy and Mr Michael McDowell - said that wasteful spending was rife.
Mr McCreevy said: "Maladministration, sloth, lack of accountability, lack of transparency - these vices all seem to be endemic across Government Departments."
Mr McDowell said the report came in the context of the revelation of hundreds of millions of pounds in annual social welfare fraud. "In virtually every Department and State agency, there is a constant theme of slovenliness, lack of accountability and downright fraud."
. EU agriculture payments worth £9 million lost through inefficiencies.
. Department of Agriculture paid £825,000 in 1995 for overtime worked in 1996.
. Revenue will collect only £553 million of £1,950 million tax outstanding on its books.
. Social Welfare overpayments of £16 million detected in 1995, only £6 million recovered.
. Shannon Airport overran £1.8 million marketing budget by almost £1 million.
. 25 per cent overrun in £10 million estimate for Dublin Castle refurbishment.
. New kitchen in Mountjoy Jail cost £2.8 million.