THE REVENUE Commissioners estimate the shadow economy in Ireland is worth as much as €21 billion and are targeting enforcement activities on sectors which have the greatest potential to operate using cash.
Internal records show that officials feel the risk posed by the so-called black economy is growing as a result of the recession as people look for ways to replace lost income or profits.
Now the State agency is targeting hundreds of audits in high-risk sectors such as hospitality and construction as well as among white-collar professionals. So-called “streetscape” audits where every business on a particular street is examined are also planned.
Documents obtained by The Irish Times also show the organisation has commissioned a range of unpublished surveys in recent times into the attitudes of the population towards paying tax.
They indicate that many are ambivalent about tax evasion and feel that cheating on welfare payments is a much more serious offence than evading tax.
A national poll of just over 1,000 people in 2009 found that between 40 and 50 per cent of respondents felt under-reporting on tax, exaggerating expenses and failing to declare additional income was “totally unacceptable”.
Similarly, just over half (56 per cent) felt tax evasion was “not acceptable”. Respondents were also divided when asked whether tax evaders should face jail, with 55 per cent agreeing.
In contrast, around 80 per cent felt deliberate social welfare fraud was “completely unacceptable”.
Despite these findings, the vast majority (90 per cent) felt it was every taxpayer’s civil responsibility to pay the correct amount of tax.
The survey also asked whether respondents had been offered services for cash with the intention of avoiding tax. Around 20 per cent said they had been offered these services in the past and around 15 per cent admitted to using them.
Respondents said they had been offered services for cash, but those who used them said they typically availed of them only once.
Another 3 per cent admitted to engaging in work which they did not declare to the Revenue Commissioners.
In general, just over half – 51 per cent – felt there was a culture of tax evasion in Ireland.
A separate survey of PAYE taxpayers commissioned by the Revenue last year found a much more hostile attitude towards tax evasion. A large majority (69 per cent) agreed that such fraud was not acceptable.
In international terms, the scale of Ireland’s shadow economy appears to be in line with other developed countries.
International research indicates the sector in Ireland is worth around 13 per cent of Gross Domestic Product. This ranks us in the middle of the 21 OECD (the Organisation for Economic Co-operation and Development) countries surveyed, and places us below Germany and Nordic countries.