Revenue receipts fall €8bn

The Revenue Commissioners said its net receipts last year were €41 billion, some €8 billion below the Budget estimate, as the economy fell into recession.

In its annual report for 2008, the Revenue said the initial problems in the construction industry had spread to almost all sectors of the economy by the second half of the year. This led to severe falls in tax and duty receipts which were down 9.2 per cent or €6.4 billion compared to 2007.

Property-related taxes including capital gains and stamp duty were 50 per cent lower than 2007.

VAT receipts, the largest tax category, were €1 billion lower as unemployment and concerns over job security saw consumers curtail spending.

Chairwoman Josephine Feehily also called on businesses having difficulty meeting tax and duty obligations to discuss the issue with the Revenue.

“We do not want to make the situation worse than it already is – but when there is no realistic engagement with us and we need to make hard decisions, we will do so”. She said an increasing number, or around 400 firms a month, were asking for more time to deal with their tax bill.

Last year the Revenue collected €632 million from 360,800 audits and compliance checks, down from the €734 million collected from 250,000 checks in 2007.

Revenue secured 20 convictions for large-scale tax and duty evasion. Revenue's special investigations, including investigations into bogus non-resident accounts, life insurance and Ansbacher had yielded €2.48 billion by the end of 2008, with €75 million collected last year.

A voluntary disclosure scheme for people holding untaxed funds of €100,000 or more, in banks, building societies, credit unions or the Post Office has yielded €73.8 million to date, the Revenue said.

Illegal drugs with an estimated value of €152 million were seized last year and almost €3.5 million of suspected criminal cash was confiscated at ports and airports. Cigarettes valued at €54 million and tobacco worth approximately €1 million were seized last year.

Ms Feehily said Revenue's administration costs as a percentage of receipts was 0.96 per cent. While this compares favourably with tax and customs offices in other countries she said “in the context of Government policy on public expenditure that we must reduce our operating costs while still delivering key business programmes”.

She described 2008 as “a year of great challenge” and despite the economic downturn volumes of business increased under many headings.

The Revenue is preparing for a third Finance Bill in a little over 12 months.