Frank Daly wants compliance and he warns tax evaders he will continue his pursuit of anyone trying to dodge tax, writes Siobhán Creaton, Finance Correspondent

Mr Frank Daly has been chairman of the Revenue Commissioners for 15 months. During that time he has spearheaded a complete overhaul of the 80-year-old organisation and has publicly worked to improve tax compliance by warning that tax dodgers will be caught and punished.

Yesterday he revealed that the State's tax collection agency had a busy 2002 collecting total revenues of €29 billion, €1.25 billion more than in the previous year. Some €700 million of these funds came from individuals who had evaded taxes over many years using bogus non-resident accounts, or by participating in schemes such as the Ansbacher Deposits or by taking out unauthorised offshore investments sold by National Irish Bank.

Its most recent trawl of Bank of Ireland's Trust company in Jersey, though, must be deemed one of the most successful undertaken yet.

In the past three weeks some €8 million has been voluntarily handed over by a small number of the 254 who used these structures.

This investigation and the swift results it has yielded is said to best typify Mr Daly's approach.

Some tax advisers say he has effectively "privatised tax collection" by transferring the onus onto tax evaders to voluntarily come forward rather than wait for the Revenue Commissioners to find them.

There is a voluntary disclosure code that provides incentives, such as capping the amount of interest due, for anyone who confesses their misdeeds to the Revenue.

Likewise the code is designed to impose maximum penalties and financial pain on anyone who brazens it out and waits for the taxman to knock on their door.

It is in the Revenue's interest to encourage people to come forward as it lightens its load and substantially reduces the investigation costs associated with each case.

Mr Daly and his team appear to have highlighted the benefits afforded to tax evaders who make a voluntary disclosure to Bank of Ireland's senior management during the preliminary discussions ahead of its investigation of its business in Jersey.

The bank in turn was swift enough to convey this to their customers and suddenly they were coughing up millions.

Mr Daly has issued many warnings to tax evaders the most memorable being when he said the Revenue would "stick like limpets" to those found to be flouting the law.

The investigation into bogus non-resident accounts was broadened under his watch and resulted in thousands of letters being sent to individuals whose names and details had been disclosed to the Revenue by the State's banks and building societies.

He seems determined to wind down this investigation, which has yielded €634 million to date, by the end of this year.

Another 40,000 of these accounts have been identified and letters will be sent out over the months ahead.

When asked how much longer the Ansbacher Investigation would take, Mr Daly, said he would be retiring in a few years, implying his successor may inherit this particular problem. This inquiry is by far the most complex and troublesome one for the Revenue.

Much of the evidence needed to establish how many of the 289 cases were guilty of tax evasion is in offshore locations that have so far proved unco-operative.

His team is calculating what it thinks many of these individuals might owe the State in terms of unpaid taxes, interest and penalties.

The chairman says the Revenue will be "slapping" these assessments on these individuals and much of its progress will depend on their response.

The restructuring of the Revenue Commissioners is a huge undertaking and while taxpayers will not have noted any great change the reforms have the potential to streamline the system and improve how it deals with taxpayers.

Three new divisions have been established, the investigations and prosecutions division, a large cases division and a south-east region.

Other divisions are also planned to allow different districts to deal with all taxpayer's affairs in that locality.

Mr Daly is seen as someone who is particularly interested in enhancing the technology and processes used by the Revenue to make it easier for taxpayers to make returns and also to speed up detection.

Its audit work has already benefited from the increased use of a computer-based risk analysis selection system that allows it to monitor sectors and individuals more closely.

In 2002 some 16,186 companies and individuals were audited by the Revenue yielding €287 million.

The Revenue has also taken more prosecutions. At the end of last year there were three successful prosecutions for tax evasion.

There were 1,038 convictions for failure to file tax returns, 221 convictions for unlicensed trading, 59 convictions for smuggling, customs fraud and illegal selling offences.

Mr Daly has made it clear that he will continue to pursue tax evaders and will be pleased if he can improve further the level of compliance in the Irish economy this year.