Opening Statement by Revenue Chairman, Frank Daly
Opening Statement by Revenue Chairman, Frank Daly
Public Accounts Committee Hearing, 18 November, 2004.
Revenue Vote 2003
Chairman
1. I thank the Chairman and members of the committee for this opportunity to make an opening statement in relation to paragraphs 3.1 to 3.5 of the Comptroller and Auditor General's Report.
2. Paragraph 3.1 shows net receipts at €32.214 billion. This represents an increase of almost €3 billion, or 10%, on the figure for 2002 and was €405m in excess of the budget target figure of €31.809 billion. This surplus over the target figure was mainly due to much better than expected yields from capital gains tax and stamp duties.
3. Paragraph 3.2 deals with tax write-offs. The amount written off in the year was €119 million in comparison to €178m in 2002. As I have said before to this committee, Revenue, like every other tax administration or business, inevitably experiences some bad debt. Our objective remains to minimise this in every way possible and we will only write it off when we are satisfied that it is genuinely uncollectible or uneconomic to pursue. Amounts written off should of course be viewed in the context of the amount collected. As a percentage of the total tax collected in 2003 the amount written off was about a quarter of one per cent of gross collection (including PRSI).
4. Paragraph 3.3 reports on the Revenue Audit Programme. The audit programme
is an established and successful means of ensuring compliance with the
self-assessment system. Although the number of audits completed in 2003
was slightly down on the 2002 count, the yield was substantially up by
€160 million. As indicated in the Report it was not possible to meet
the target for random audits due to the need to divert resources to audit
of bogus non-resident accounts and special investigations. Members will
remember the extensive discussions we had at earlier meetings about the
design of our random audit programme. I am pleased to be able to inform
the Committee today that we will have a new random audit programme coming
on stream in the next month. Within this new programme the audits will
be entirely random as compared to the targeted random audits of the past.
Finally on audits I would mention that in the course of the audit programme
32 cases were identified for possible investigation with a view to prosecution
for tax evasion.
5. Paragraph 3.4 deals with prosecutions for serious tax evasion and the prosecution of non-filers. In addition to the activity reported upon in these areas it should also be mentioned that there is a considerable number of Revenue prosecutions in the Customs and Excise area. We had, for example, 65 convictions for smuggling, 145 convictions for marked mineral oil offences and 169 convictions for unlicensed trading.
6. Paragraph 3.5 refers to a number of special investigations being undertaken by Revenue and the re-audit of DIRT in a Financial Institution, namely, Anglo-Irish Bank. The DIRT settlement with Anglo-Irish Bank is as I outlined to the committee when I last appeared before it in July of this year.
I would like to update the Committee in relation to the ongoing Special Investigations Programme.
The amount for the bogus non-resident account investigation now stands at €782 million (made up of €225 million in DIRT paid by financial institutions, €227 million under the voluntary disclosure scheme and €330 million paid in the investigations since then).
The figure for the NIB-CMI investigation stands at €53 million.
The Ansbacher investigation stands at €44 million.
The follow-through from the Moriarty, Mahon and Flood tribunals is at €25 million.
And, lastly, but by no means least, our Offshore Assets Investigation stands at €705 million.
The running total as a result of these investigations stands at €1,609 million which is an increase of over €50 million since I last reported to the Committee on 22 July, 2004.
There is one final point worth mentioning in regard to these investigations. It concerns Revenue's determination to obtain access to the information necessary to deal with the tax evasion involved.
As you know in the BNR and Offshore investigations we have generally
adopted an approach of firstly giving people an opportunity to come clean
with voluntary disclosure but making it clear that we would then follow
through to tackle those who did not. Obviously this follow through requires
dogged pursuit of the identity of the non disclosers - we did this very
successfully for example through the Courts in the Bogus Accounts investigation
and indeed we are about to go the same route in the Offshore Investigation.
However members will recall that the Offshore programme in fact commenced
with an intensive investigation into trusts administered in Jersey by
a subsidiary of an Irish bank. An opportunity was given to the settlors
of these trusts to come clean with voluntary disclosure prior to the investigation
and by 31 May, 2003 a total of 254 individuals came forward and paid in
excess of €100 million. We stated at the time that we would follow
through to identify the remaining small number of individuals who failed
to come forward. We have now done so, have secured the names, addresses
and account details of all these individuals and they are now the subject
of detailed enquiry which will include a criminal investigation. While
the numbers involved may be small, the important point is that having
promised to follow through we did so.
Thank you Chairman.