Revenue: A failed entity

Revenue recently published its preliminary business results for year ending 31 December 2009.

There are some interesting figures in the report. For example, in 2009 there were just 6 convictions for serious tax evasion, 4 more are under consideration by the DPP and there are 78 ongoing investigations.

Special investigations last year generated a total of €114.4 million compared with €54 in 2008.

By any standards these are paltry sums but by Irish standards, where tax evasion is still widespread and still widely seen as a misdemeanor rather than a crime, they are miniscule and they tell us just one thing about the Irish Revenue service – it’s a failure.

But this failure, like the failure of the financial regulator and the Dept. of Finance, is not due to incompetence, it’s due to deliberate, well planned policy.

Tax amnesties are at the core of Revenue’s policy since the disgraceful amnesty of 1993 which, I believe, allowed a good number of serious tax evaders off the hook. As I wrote in 2007:

Ireland is the only country in the world that operates a policy of continuous amnesties for tax criminals, all other jurisdictions preferring the option of law enforcement.

In that article I wrote about Revenue’s lazy and cheap habit of sending out gentle letters to tax evaders offering them all kinds of incentives if they agreed to pay their taxes.

An Irish Independent article on the matter tells us that because of the current budget deficit of €24.6 billion Revenue is taking an aggressive stance on tax evasion (In accountable jurisdictions aggressive action is the norm when it comes to tax evasion).

So what is this ‘new’ aggressive stance by Revenue?

Well, er, they’ve sent out letters to 7,000 people who own second homes or investment properties inviting them to obey the law in relation to capital gains tax. In other words – another tax amnesty.

At the launch of every amnesty law abiding citizens are assured by politicians and officials that henceforth the full force of the law will be brought down on those who fail to pay their due taxes.

These assurances are nothing but lies and the statistics confirms this.

The report (probably due to embarrassment) has nothing to say about the number of people jailed for tax evasion so I gave Revenue a call to find out.

In 2009 just two people received jail sentences but an even more incredible and disgraceful statistic is that between 2000 and 2008 only seven people were put behind bars for tax evasion.