People reading the Comptroller and Auditor General's report could be excused for assuming that the Revenue Commissioners have insufficient laws and powers. Nothing could be further from the truth. The laws and regulations are in place. They are ignored not just by the persons who wish to underpay tax - or pay none at all - but they are also much ignored by the persons whose job it is to collect the tax.
The Comptroller notes that the level off compliance with self assessment has dropped considerably. In 1991 compliance on income tax self assessment amounted to 98 per cent. It was, of course, new and taxpayers reckoned they could take considerable liberties. When they found out subsequently that this gave rise to inquiries some lost enthusiasm for self assessment it is now down to 79 per cent. Of more concern however, the Comptroller says that there is a "high level" of inadequate record keeping by self assessed taxpayers, an offence in law and yet not one individual has been prosecuted. How can self assessment retain credibility if the taxpayers concerned are allowed blatantly to obfuscate their liability, free from prosecution? Is it any wonder that PAYE payers believe the tax burden is not being shared equitably?
The Revenue Commissioners are not the only ones with questions to answer. The report reveals extraordinary incompetence in the Department of Agriculture. Some £3.5 million of EU funds were lost because of delays by the Department in making payments to farmers within the specified time limits. Not only that but another £2.8 million was disallowed on export refunds from contracts with Iraq and Yemen because of faults in the documentation and £250,000 was lost because the Department delayed making refund claims.
If this catalogue of errors occurred in a private sector company there would be hell to pay. The Minister for Agriculture will hopefully get a roasting in the Dail; he deserves it. And the Dail could usefully inquire of the Minister for Health why it was deemed necessary to hand out £26 million to doctors and dentists without requiring tax clearance certificates. It goes without saying that there are different rules for the self employed but why is it that self employed rules often seem not to be enforced?
Shannon Airport Marketing was set up in 1994 to boost traffic through Shannon. Having a staff of five it was given a (sizeable) budget of £1.8 million but proceeded instead to spend £2.8 million. There is a well established public sector strategy of bursting your budget in order to better claim a higher budget the following year. The Comptroller feels however that the overspend was due solely to poor financial management; whatever the truth, the overspend is unconscionable.
The theme which runs right through the report with regard to tax is that an understanding exists that not much energy need be expended in chasing tax defaulters. A cornerstone of anti avoidance is meant to be the audits carried out by the Revenue Commissioners. And yet the Comptroller reports that it is "difficult to determine the extent and nature of the (audit) and how the settlement terms were arrived at" because the audit results are poorly documented. Even worse, the Revenue has no standard audit programme. Every self respecting accountancy firm has a standard audit programme and has had for years. Are the political parties at all concerned that tax defaulters are flourishing in such a climate of indifference?