What is the bottom line?
Quantification of the possible proceeds of an amnesty and of the risks to tax collection is difficult. Much of the argument above shows that there are trade-offs between these in the choices to be made under many aspects of the possible amnesty. However, in almost all instances, the feature that favours the success of the amnesty in terms of amounts disclosed increases the risk to current tax collection, and vice versa. Also, the greater the probability that the evader will be caught by the Revenue's investigations, the more likely he will be able to avail of the amnesty.
It is somewhat easier to identify the potential loss to the Exchequer on the other side of the scale. Of the £320 million (minimum) expected from audit, special investigation, enforcement etc. this year, about £270 million is regarded as being at high risk, depending on the precise terms of the amnesty.
Furthermore, a slippage of just 1 per cent in compliance would, conservatively, lead to a £65 million loss. In a worst-case scenario, suppose half of the £270 million and 1 per cent in compliance were forgone, the loss would amount to £200 million To balance this, even on "year one" basis the amnestied - funds would have to amount to £2 billion. Even on the "softest" of amnesties, this return would not be possible.
Conclusion
Proponents of the amnesty idea have pointed to the possibility of very large sums of undisclosed money being unearthed which would otherwise be beyond the reach of the Revenue Commissioners, thereby leading to a "windfall" gain to the Exchequer.
As can be seen from the analysis above, there are strong counter-arguments in relation to the risk to the tax collection system, both in terms of grave risk to the pursuit of current arrears of tax, and of a significant disimprovement in the compliance of normally scrupulous taxpayers. It is impossible to put conclusive figures on either side of this argument.
What is incontrovertible, however, is that the "softer" the amnesty scheme, the greater the risk to the Exchequer; similarly, the more effort that is put into limiting the Exchequer exposure by limiting the scope and terms of the incentive, the less attractive the scheme would be. The fact that the "take" from the amnesty would be once-off, but the damage to particular collection initiatives and general tax compliance would be ongoing, is a significant factor in this judgment.
The granting of another, much more generous, amnesty so soon after the previous one would also lead to the expectation that these would be a regular occurrence, thereby inviting further evasion. It is doubtful if "last-chance" measures would be taken seriously, irrespective of the outcome.
Considerable success in attracting funds would suggest that another similar amnesty was likely to arise some years hence, while only limited success could create an expectation of a more generous scheme. In other words, the basis on which the improvement in tax collection has taken place since 1988 would be undermined.
The Minister considers that the risks to the Exchequer considerably outweigh the possible windfall gains. Consequently, within the narrow confines of gains or losses to the Exchequer, he feels compelled to recommend against any such scheme.
The likely ramifications for general tax compliance have been mentioned already above. This scheme would be likely to be seen as benefiting a select minority, with a limited benefit to the public good even if just the up-front yield from the scheme itself were counted, and zero or negative benefit if the wider considerations of overall tax collection are taken into account. There would be considerable opposition to this scheme from the general body of taxpayers, and on these grounds also the Minister could not recommend the scheme.