This year's report confirms the freefall in tax receipts, and Revenue's response to the changing economic circumstances.
As might be expected, there's considerable emphasis on collection, audit and enforcement. Revenue note that "2009 was the second full year of using our electronic risk analysis system (REAP) ... 64% of cases opened for audit in 2009 came from the 20% of cases identified by REAP as posing the greatest tax risk." They go on to say that "Work also commenced to extend the scope of our REAP system to include the PAYE sector." Sectoral activity - the examination of taxpayers by reference to what they do rather than necessarily how they do it - seems set to continue.
One sector already receiving attention is the Financial Services Industry; Revenue clearly don't want to be found wanting in their activities as an arm of government in this area.
- Compliance programmes focused on tax risk in that sector including claims for loss relief, bad debts and employer taxes liabilities.
- Audit yield from the sector in 2009 amounted to €38 million
- Tax impact of restricted losses amounted to €100 million.
- There were enquiries into approximately 300 cases of the directors and executive/management level employees in the six main financial institutions - €1,137,030 in tax has been collected from these enquiries.
More generally, collection enforcement activity was actually down between 2008 and 2009, with fewer referrals to sheriffs and solicitors albeit with higher amounts involved. Attachment activity was substantially up both in the number of cases - (3,200 vs 2,360) and in monetary value terms (€205m vs €131m).
More positively, the report highlights the increase in the number of Double Taxation Agreements. Seven new treaties were signed during 2009, and the report looks forward to seven further treaties (including a treaty with Hong Kong) being signed during 2010. A comprehensive treaty network is very important in securing Foreign Direct Investment.
The Revenue Board are going to some lengths to outline a pragmatic approach to tax collection - "We are committed to keeping compliance levels up and debt levels down to the maximum extent possible. To this end, our support for viable businesses experiencing short-term difficulties will continue in 2010 and beyond, if necessary."
Revenue's Annual Report for 2009 is available on their website.