The prospects for a new national pay agreement will be seriously affected by what the Government and the Revenue Commissioners do to tackle tax evasion, the president of SIPTU Mr Jimmy Somers has warned. Commenting on the report of the Comptroller & Auditor General, the leader of the State's largest trade union said that it was critical for the problem to be "sorted now and for good".

Meanwhile, IMPACT's national secretary for the civil service, Mr Paddy Keating, who represents trade union members in the Revenue Commissioners, said yesterday that the trade union movement should be seeking "better tax equity, a better deal for the PAYE sector and greater clarity and focus" by the Revenue when tackling tax evasion. Mr Keating said that the number of revenue staff carrying out audits on the State's 37 major financial institutions was still in single figures.

Mr Somers said that Mr Purcell's report "makes shocking reading as it confirms the extent of the complicity across the entire system which supported tax cheats over compliant tax payers". Contrasting the special treatment afforded to "tax cheats", he added that "it is simply not acceptable at all for a two tier system to operate, where PAYE workers have to account for every single penny while this scale of fraud is facilitated up to the highest levels".

The Revenue Commissioners now had to show they had the will to use the powers they had been given. "A new climate fully supportive of tax compliance is essential if tax reforms, which are an increasingly important aspect of national pay negotiations, are to have credibility. Workers will be looking very critically at the steps the Government and Revenue Commissioners take in the coming months prior to their deciding on any new pay talks." The problem of tax evasion would always be there. By being more focussed and giving more information to the public. Mr Keating believed that the Revenue Commissioners could make the service more effective and respected, as well as more accountable.