TAX EVASION and welfare fraud are two sides of the same coin. They are criminal acts that damage communal cohesion and concepts of fairness within society. Anecdotal evidence suggests that since the banking and construction crisis developed in 2008, the black economy has grown, along with tax evasion and welfare fraud. That cannot be tolerated.
Consistent exchequer surpluses during the Celtic Tiger years and intensive job creation encouraged the growth of a relaxed attitude towards the validity of some social welfare claims. But when government revenues nose-dived and unemployment levels rose rapidly, that changed. “Savings” of close to €500 million were reported by the Department of Social Welfare for 2008 and again for 2009 as a tougher approach to cases of suspected fraud was introduced.
An even more determined approach to rooting out abuses within the system has now been signalled by the Minister for Social Welfare Joan Burton. For the first time, people receiving unemployment benefits will face financial penalties if consistently they refuse to take up offers of training, education or course placements. A refusal of such offers raises the question of whether those involved are working in the black economy. Alternatively, the Minister said, it was not in the interests of young people to drift into a lifetime of unemployment.
Last week, chairman of the Revenue Commissioners Josephine Feehily reported similar levels of “savings” arising from special audits conducted on selected groups within society. When the black economy is mentioned, people tend to think about back-street businesses and cash-in-hand manual workers. But, in warning about the increasing risk of tax evasion during a recession, Ms Feehily urged the public not to pay for any professional services in cash. Specifically, she had in mind doctors, dentists and members of the legal profession. She said the Revenue would also target commercial outlets that rigged their tills to disguise actual sales. In addition, a trawl of Swiss and other foreign bank accounts is being planned.
Illegal, selfish behaviour is not confined to any one group. There has been a long history of individuals avoiding their responsibilities at all levels of society. In the past, services to the poor were reduced, even as wealthy individuals hid their money in Ansbacher accounts and sent money offshore to avoid Dirt tax. This behaviour was facilitated by banks and ignored by politicians. It cannot be allowed to recur.