Revenue publishes 2021 Annual Report
Today (11/05/2022) Revenue announced the publication of its Annual Report for 2021.
The report reflects an exceptional year for Revenue. Against the backdrop of a fundamentally changed trading environment between Ireland and Great Britain, and the continued significant economic and social disruptions associated with the Covid-19 pandemic, Revenue collected a record amount of tax and duty in 2021. Revenue also put all the necessary measures in place to effectively administer the changes to the Local Property Tax for the new valuation period which began on 1 November last and continued to play a significant role in the delivery of key Government supports to businesses as part of the national response to the Covid-19 pandemic.
Alongside the 2021 Annual Report, Revenue also published a number of other reports today, including research reports on Corporation Tax, Income Tax, VAT and VRT; summaries of the 2021 National Random Sampling Programme for marked mineral oil products and the results of the Tobacco Products Research Survey 2021.
Commenting on today’s publications Revenue Chairman, Niall Cody, said:
“Revenue collected total gross receipts of almost €96.6 billion, including €17.5 billion in non-Exchequer receipts collected on behalf of other Government Departments, Agencies and EU Member States. Net Exchequer receipts of €67.5 billion were up by 20% or €11.3 billion on 2020.
Despite the challenges and uncertainty of ever-changing and, in some instances, rapidly changing business environments, timely compliance rates remained strong across all taxes for 2021. This is evidence of the recognised importance of timely tax and duty compliance by society generally. It also reflects the positive engagement by businesses, individual taxpayers and tax practitioners during the year and their contribution to a strong culture of voluntary compliance, despite the difficulties many faced.”
UK’s Exit from the EU
It is now well over a year since the UK’s withdrawal from the EU took full effect. Commenting on the practical impacts of the UK being outside the EU’s Customs Union and Single Market, Revenue Commissioner and Director-General of Customs, Gerry Harrahill, said:
“Since 1 January 2021, trade with the UK is governed by the terms agreed in the EU-UK Trade and Cooperation Agreement. This means that goods that once moved freely between Ireland and Great Britain are now subject to Customs formalities. This significant and permanent change in trading arrangements with our nearest neighbour represents the biggest change for trade, business and State Agencies alike since the creation of the EU Single Market 30 years ago.
There is no doubt that the first quarter of 2021 was extremely challenging for all stakeholders, including ourselves and the other State Agencies and Departments, DAFM and the HSE, as we engaged with the practical and everyday challenges brought about by the UK’s departure from the EU. Our approach to addressing all challenges was collaborative and solution focused and included significant engagement with key stakeholder groups and individual businesses. The valuable insights we gained from our intensive engagement with businesses and trade representative bodies enabled us and the other State Agencies to streamline processes and improve our services.
In 2021, we processed a record breaking 29.8 million customs declarations, 27.1 million of which were import declarations. This compares to just over 1 million import declarations processed in 2020. A key indicator of our success and of the benefits of collaboration with business is that in relation to freight vehicle movements, 86% of all freight vehicle movements from Great Britain into Ireland were green routed on arrival meaning they passed freely through the relevant port without the need for any additional interaction with Revenue or any other State Agency.
There is clear evidence that businesses made enormous progress in adapting to the new requirements in the last year or so. Businesses have now adapted to the changes brought about by the UKs departure for the EU and are either successfully trading with or through Great Britain or have changed their supply chains or supply routes so as to eliminate trade with a 3rd country and therefore the need for compliance with customs and other regulatory formalities.”
Local Property Tax
Commenting on the first revaluation of residential properties since the introduction of Local Property Tax (LPT) over eight years ago, Mr. Cody said:
“Following the enactment of legislation last July that changed how LPT operated, within a relatively short space of time we put all the necessary measures in place, including system changes, an updated online property valuation guide and a comprehensive communication campaign, in advance of the new valuation period which began on 1 November 2021. All residential property owners were required to determine the value of their property, select the LPT valuation band applicable to that valuation when submitting their LPT Return and pay or make arrangements to pay their LPT for 2022. We saw significant engagement and strong levels of compliance by property owners in advance of the November filing deadline, and indeed since. Updated LPT statistics published today show that the return compliance rate for LPT for 2022 currently stands at 90%, while the payment compliance rate is 95%.
Notwithstanding the strong levels of compliance, we know that some property owners still have not submitted an LPT Return and perhaps mistakenly think they have met their LPT obligations by virtue of the fact that they have paid their LPT in full or are paying it by instalment. We recently undertook an LPT Return reminder campaign which resulted in a further marked increased in LPT compliance rates. For the remaining minority of property owners who haven’t yet filed their LPT Return or paid or made arrangements to pay their LPT for 2022 I strongly encourage them to do so immediately.”
Commenting on Revenue’s role in the delivery of critical Government Covid-19 supports, Mr Cody said:
“The economic and social disruptions caused by the Covid-19 pandemic continued during 2021. A number of adjustments were made to the Covid Support Schemes, particularly the CRSS and EWSS, as public health restrictions changed throughout the year.
The outlook for the economy as regards Covid-19 continues to improve, with public health restrictions largely entirely lifted at this point. The CRSS and BRSS have come to an end and, as required by legislation, we have published a list of businesses that availed of both schemes on our website. While payments made under the EWSS are currently limited to businesses impacted by public health restrictions introduced in December 2021, these too will end at the end of this month.
Looking back over the past two years, we are very proud of the significant contribution we made as part of the national response to the Covid-19 pandemic. Due to the nature of the emergency at hand, we made critical changes, often at an unprecedented pace, to our existing tax collection systems that enabled us to instead pay out a total of over €10 billion in vital supports to impacted businesses, employers and employees. These supports played an integral role in protecting lives, jobs and livelihoods.”
Compliance Intervention Framework
Commenting on Revenue’s new Compliance Intervention Framework, Mr Harrahill said:
“On 1 May 2022, a new Compliance Intervention Framework, supported by a revised Code of Practice for Revenue Compliance Interventions, came into effect. The new framework supports compliance by further enhancing our real-time engagement with taxpayers, expanding real-time compliance management of our segmented case-base. It incorporates our traditional tax audit approach within a Compliance Intervention Framework that provides for a consistent, graduated response to risk and taxpayer compliance behaviour. These responses range from easily accessible opportunities to voluntarily correct errors up to criminal investigation for serious cases of fraud or evasion.
In advance of the framework coming into effect we had significant, constructive engagement with tax practitioners and their representative bodies. This was designed to optimise the understanding of the new framework and its underpinning of a strong voluntary compliance culture and ensuring that the response to non-compliance is effective and risk focused. We will continue this collaborative approach on the practical and operational aspects of the framework as it beds in over the coming months.”
Other key features of Revenue’s performance in 2021
Other key features of Revenue’s performance in 2021 included:
- Continued enhancement of online and digital services to enable taxpayers and tax agents to self-serve to the greatest extent possible, including a facility that enables PAYE taxpayers to claim certain tax credits and reliefs in ‘real-time’ and a digital Professional Services Withholding Tax (PSWT) service
- Completing over 463,800 compliance interventions, yielding €1,388 million in tax, interest and penalties, the biggest annual compliance yield recorded to date
- Tax settlements totalling over €30 million agreed with 86 taxpayers who were published on the Lists of Tax Defaulters
- Seizure of drugs worth almos €115 million and tobacco products valued at over €67 million arising from our broad range of interventions targeting fraud, illicit trade, smuggling and organised crime.
Looking towards the future, Mr Cody said:
“While the economic impacts of Covid-19 have eased, we are aware of the current challenges facing the economy as regards the security of supply chains and inflation. We are also acutely aware of the challenges brought about by Russia’s war on Ukraine and we will play our part to support the national response.
The efficient collection of taxes and duties due to the State continues to be Revenue’s primary role and focus. We will support business and trade as they adjust to the UK Government’s import requirements when they are clarified, and we will also continue to support the Department of Finance in relation to the evolving and complex international tax agenda.
The first phase of the Debt Warehousing Scheme is finished, and the debt is now in the zero-interest phase. For those businesses whose debt remains parked in the warehouse, there is only one condition they are required to meet to retain the significantly reduced interest rates of zero and three percent available under the scheme; that is to file current tax returns as they fall due and pay the associated tax liabilities on time. From 2023 onwards, we will work effectively and proactively with businesses towards dealing with their parked tax debts.
Looking ahead there are many interesting opportunities on the horizon for both our existing staff and for those who may join us in the future. Through investing in our people, effective collaboration internally and with stakeholders, strong support of an innovative culture and the increased access to and use of real-time data we will reform and modernise our approach to tax and customs administration. Like many organisations across the country and globally, we have adapted to new ways of working over the past two years. This experience very much informs the future opportunities available to us in terms of how we work and where we work, and we are actively progressing our future, longer-term blended working arrangements. We will continue to strengthen the supports and resources currently in place to not only continue delivering our core business but to also enable a working environment that seamlessly facilitates a mix of on-site and virtual working. Our aim is to maximise flexibilities that enhance wellness and a better work-life balance. This will increase the attractiveness of Revenue as an employer of choice while and at the same time make sure that we continue to be a highly effective organisation that consistently delivers strong performance.
Finally, both Commissioner Harrahill and I would like to thank all Revenue staff for their on-going hard work and resilience, especially so at a time of unprecedented challenges. Our achievements in 2021 would not have been possible without their professionalism, dedication and commitment. We also acknowledge and thank those Revenue staff who retired in the past year, many of whom dedicated 40 or more years of service to the State. We particularly acknowledge the contribution to Revenue made by our former colleague, Commissioner Michael Gladney, who retired on 15 April 2022.”