Friday 9 December 2016

Black economy targeted in new probe

Published 20/04/2011 | 16:44

Tax inspectors are targeting cash businesses as part of a probe into Ireland's multimillion-euro black economy.

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Josephine Feehily, chair of the Revenue Commissioners, said it would be foolish for a tax authority not to recognise the increased risk of tax evasion during a recession.

Auditors carried out 11,008 audits on cash businesses in 2010 resulting in a yield €434.7m - with more than €60m raised from 2,226 checks in the construction industry.

Examining 328 white collar professionals such as doctors, dentists, vets and solicitors, yielded another €9.4m.

Ms Feehily said: "It is well known and well documented that in times of economy there is a big increase in the cash economy so that's why we're focusing on it."

Constructions chiefs estimate the black economy is taking €1bn out of the industry and up to €200m from the country's tax intake.

Revenue's annual report for 2010 showed net receipts amounted to €31.92bn, 2.25pc ahead of the Budget estimate but down €1.36bn on the previous year.

Ms Feehily said tax evasion affected everybody in the community by depriving the Exchequer of funds needed for public services.

"Unlike the big problems of the country, everyone can do something about tax evasion," she continued.

"Don't ask a tradesperson to give you a 'cash' price, and put her in an awkward position.

"Don't pay your service professional in cash if he asks, and make sure you get a receipt, ideally one that shows the VAT you have paid."

She warned inspectors were getting intelligence from bodies like the Construction Federation of Ireland and the Sustainable Energy Authority Ireland on tradesmen who may be working on single builds or in receipt of retrofit grants.

Checks on other cash businesses including restaurants, fast food outlets, pubs, nightclubs and motor trade raised more than €28m.

Inspectors also uncovered zappers, a tool used by shop keepers to re-set tills and lower their takings, which have since been outlawed.

At the other end of the scale, Revenue revealed it was working closely with the state's 'bad bank' Nama to see how more than 100 properties on its books were originally financed.

Inquiries into approximately 300 directors and executive level employees in the six main financial institutions also raised €1.3m to date.

Mr Feehily added that nearly €8m had been collected from its offshore assets project last year.

During 2010, a request was also made to a Treaty partner for information over details of accounts held in a bank in Switzerland by people with Irish addresses.

"While some had already made a disclosure to Revenue under the 2004 voluntary disclosure scheme, a small number of individuals have been identified with questions to answer," she added.

"This investigation is in its early stages and has yielded €2m to date."

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