Revenue publishes 2023 Annual Report

Today, (25/04/2024), Revenue announced the publication of its 2023 Annual Report, together with a number of other research and statistical papers.

The report reflects a year of exceptional performance for Revenue, with gross receipts of €127.9 billion collected, including €26.3 billion in non-Exchequer receipts collected on behalf of other Government Departments and agencies. Net Exchequer receipts, after repayments and transfers of non-Exchequer receipts collected on behalf of other Departments and agencies, were €87.2 billion. 2023 also saw a continuation of high voluntary compliance rates, at over 99% for large cases and 98% for medium cases. Timely compliance rates for all other cases in 2023 was 91%, up from 88% in 2022.

Commenting on today’s publications Revenue Chairman, Niall Cody, said:

“Continued strong levels of timely and voluntary compliance rates confirm that the vast majority of taxpayers pay the right amount of tax at the right time. Given the exceptional disruption which individual taxpayers, businesses and agents have experienced over the past four years, this is an extremely positive reflection on their continued engagement with their tax compliance obligations, and the importance that society generally places on a strong culture of voluntary and timely tax compliance. 

We acknowledge and thank all taxpayers and their representatives for their ongoing engagement and co-operation.”

Collection of Taxes and Management of Collection Risk

Our tailored approach to debt collection enables us to be agile in our response to the evolving economic environment whilst matching our resources to counter tax collection risk. Commenting on our debt management process, Revenue’s Collector General, Joe Howley, said:

“Timeliness of payment has been impacted by the action we took to suspend debt enforcement activity in light of the circumstances arising in recent years, and non-warehoused debt available for collection at the end of 2023 had risen to €1.4 billion.

Our Debt Management Service system is now fully deployed in dealing with these liabilities, but it remains our strong preference to work with taxpayers to agree a mutually acceptable solution to temporary cash flow difficulties, rather than commence collection and enforcement action. As such, our advice remains, as has always been the case, that where taxpayers are finding it difficult to pay their current taxes, they should engage with us as soon as such difficulties start to arise.”

Facilitating Voluntary Compliance and Legitimate Trade

We provide a range of services that make it as easy as possible for taxpayers to comply with their tax obligations and continue to enhance our digital service offerings in response to growing expectations that services be available through multiple channels and at times that suit taxpayers and agents.

Speaking about our aim to support taxpayers and agents to self-serve to the greatest extent possible, Revenue Commissioner, Ruth Kennedy, stated:

“2023 saw a further increase in the number of PAYE taxpayers managing their own tax affairs through our 24/7 MyAccount service, and we processed 1.4 million 2022 PAYE IT Returns during the year. We do, however, also remain committed to providing alternative service channels for those who are unable to access our online offerings. We therefore welcome the finding from our 2023 PAYE Customer Survey that over 70% of respondents are either satisfied or very satisfied with the services we provide.

Another step we took during 2023 to advance our aim of modernising taxes and duties was the launch of a consultation to modernise Ireland’s VAT System. We received over 1,100 submissions from stakeholders during the first stage of this consultation and will publish our findings in respect of same in due course.”

In implementing customs controls, we aim to facilitate legitimate trade to move as speedily and efficiently as possible. Key indicators of our success in that regard are as follows:

  • 54.2 million customs declarations processed, an increase of 11.3 million (26%) from 2022
  • 89% of the 400,423 freight vehicle movements into Ireland from GB were green routed
  • and
  • release of a new Automated Export System, simplifying documentary processes for traders.

Tackling Non-Compliance

We take a real-time, data driven approach to confronting non-compliance, which enables us to prioritise our resources on non-compliant taxpayers and ensure a level playing field for all businesses, whilst minimising the administrative burden and costs for compliant taxpayers.

Our annual compliance programmes focus on multiple risk areas, and we make full use of the statutory powers and exchange of information provisions at our disposal to enhance our data holdings. We vigorously confront cases that display indicators of non-compliance or aggressive tax planning and during 2023 we completed over 291,000 compliance interventions with a yield of €787 million and 85 tax avoidance cases with a yield of €16.5 million.

Commenting on the significant Supreme Court judgement issued in The Revenue Commissioners v. Karshan (Midlands) Ltd. t/a Domino’s Pizza, Niall Cody said:

“We welcomed the important judgement delivered by the Supreme Court in this case. Although the judgement did not change the law in relation to the classification of employment, it provided significant clarity on the key factors to be considered when classifying an individual’s employment status for income tax purposes. 

We have been working with the Department of Social Protection and Workplace Relations Commission to update the Code of Practice on Determining Employment Status, and separately on the development of our own guidelines on the impact of the judgement, and the classification of employment status will continue to be a focus area for our compliance activity going forward.”

Drugs, Tobacco, Smuggling

Identifying, targeting and disrupting illegal activity and organised crime is a key priority for us, and our enforcement teams achieved exceptional results during 2023 including 9,217 drugs seizures, with a value of €302 million, and 6,837 seizures of tobacco products, with a value of €63.4 million.

Speaking about our highly effective frontier controls, Revenue Commissioner and Director General of Customs, Gerry Harrahill, said:

“Our work against drug crime is extensive and multi-faceted, and the record breaking level of drug seizures during the year included a Joint Task Force operation onboard the bulk carrier MV Matthew in September 2023. This operation was undertaken in conjunction with our law enforcement partners and with the support of Naval and Air Corps assets and inter-agency personnel, and resulted in the largest drug seizure in the history of the State.

During this operation, members of the Army Ranger Wing of the Defence Forces were authorised, for the first time, to act as Officers of Customs to effect a boarding of a vessel at sea. This operation is therefore an excellent example of the successful collaboration between Revenue and our enforcement partners, with all agencies working together to share intelligence and fully co-ordinate and utilise their respective capabilities and skill sets.

Our risk-based detection and intervention strategy, supported by the most modern real-time analytical capabilities and techniques, enables us to adapt the way in which we deploy our assets and capabilities in response to the increasingly inventive and complex smuggling methods and concealment techniques used by those involved in trading illicit goods and products.”

Supporting Tax and Customs Reform

Throughout 2023, we worked with the Department of Finance on both national and international tax and customs policy developments, and represented Ireland’s interests at international fora. Some of the developments which featured prominently in our work programme during 2023 are highlighted below:

  • the advancement of a comprehensive proposal to reform the EU Customs Union, with particular focus on risks related to eCommerce
  • discussions on the modernisation of customs infrastructure and the progression of green customs initiatives
  • negotiations on the implementation of the Two-Pillar solution
  • and
  • analysis of proposals relating to the international taxation of companies and ongoing work to boost cross-border investment, including proposals regarding VAT in the Digital Age.

Looking ahead

In looking towards the future, Niall Cody said:

“We remain committed to supporting taxpayers to maintain high levels of voluntary compliance and pay their current tax liabilities as they fall due. We will continue to provide high-quality digital offerings, enabling taxpayers to engage with us at a time and place of their choosing, whilst also supporting those who cannot use our online services.

Confronting non-compliance in all its forms and targeting smuggling and illegal activity will remain key priorities for us and we will continue to fully leverage our extensive data and intelligence holdings in challenging same. This will further strengthen our understanding of compliance behaviour, particularly among cash businesses and the shadow economy, and assist us in identifying and dismantling core supply chains used in illegal trade.

We will be publishing our guidance on the impact of the Karshan Judgement in the coming weeks and there will be an increased focus on compliance in this area. We have encouraged businesses that engage workers on a self-employed basis, and their agents, to review the arrangements they have in place and we will work with those businesses who, having regard to the impact of the judgement, wish to voluntarily regularise their position.”

Another key priority for us during 2024 will be to continue working with viable business as they exit the Debt Warehouse Scheme. Outlining our key message to those businesses remaining within the warehouse, Joe Howley advised:

“We communicated extensively with businesses and their representatives throughout the duration of the scheme to ensure they were aware of the action required ahead of the key deadline of 1 May 2024, and the range of flexibilities available for viable businesses that require a tailored payment arrangement.

The balance in the warehouse at 23 April 2024 was €1.58 billion, and this was owed by 53,172 customers. Approximately 70% (37,200) of customers with debt in the warehouse owe amounts less than €5,000, with the bulk of the debt (€1.35 billion) being warehoused by approximately 9% of customers (4,800) with outstanding balances greater than €50,000. Phased Payment Arrangement applications are being submitted on a constant basis with almost 2,800 agreed since 31 March 2024.

It is important to note that businesses do not have to pay all of their warehoused debt by 1 May 2024. However, where a business fails to meaningfully engage with us to agree a plan for payment of the debt by this date, the balance outstanding will immediately be subject to standard debt collection proceedings and will no longer benefit from the 0% interest rate applicable to warehoused debt. The crucial message, therefore, for any business that has not yet engaged with us in respect of their warehoused debt, is to act now and engage with us immediately to formulate a payment plan.”

We will continue working with other Government Departments, the OECD, EU Commission and other international fora on the advancement and successful implementation of tax and customs reform during 2024. In particular, we will work with affected businesses and agents to ensure the successful implementation of the Pillar Two Global Anti-Base Erosion rules.

Another key priority for us during 2024 will be to continue our engagement with those impacted by the UK’s Border Target Operating Model. We worked with other Government Departments during 2023 to raise awareness among traders of the new requirements, and will continue to support business and trade as they adjust to the UK Government’s import requirements. The Office of Public Works also commenced a major infrastructure project to develop a permanent State facility in Rosslare Europort in July 2023, and we will continue to engage on this development in 2024.

Our programme of work to advance the modernisation of taxes and duties will continue during 2024 and further phases of the VAT consultation will be launched as reform proposals take clearer shape. We will also continue to support the Department of Finance in respect of the development of the European Commission’s proposals on VAT in the Digital Age.

Commenting on the continuation of our work to raise awareness of our myAccount service, Ruth Kennedy highlighted:

“In conjunction with the Minister for Finance, Michael McGrath T.D., we launched an extensive public information campaign in January 2024 to raise awareness among PAYE taxpayers about the range of tax credits and reliefs available, and how they can be claimed. The campaign also reminded PAYE taxpayers that they need to tell us about any additional income they have earned outside the PAYE system.

This campaign builds on an existing correspondence programme we have been undertaking and we will be continuing this action in 2024, writing to those individuals who our records indicate may have either overpaid or underpaid tax in any of the years 2020–2023.

I therefore encourage all PAYE taxpayers to log on to our myAccount service to finalise their tax position and ensure that they have claimed all tax credits and reliefs they are entitled to, and make other changes to the information on their Revenue record – it’s quick, it’s easy and it’s free. If Revenue owes you money, you’ll get a refund into your bank account within days. If you owe Revenue money, we’ll work with you to find a suitable payment option.”

In concluding, Niall Cody added:

“Finally, Commissioners Harrahill, Kennedy and I would like to thank all Revenue staff for their professionalism, dedication and commitment, without which our achievements in 2023 would not have been possible.” 

[Ends 25/04/2024]