Thursday 23 October 2014

Chosen enforcer of property tax

Published 24/02/2013 | 04:00

GENTLE Josephine stole the show. The unlikely champion of Ireland's enforcers led the Revenue gang into the dungeons of Leinster House.

Flanked by seven male comrades, Josephine sat serenely in the middle of a long line of grey-suited, balding apparatchiks, parrying TDs' questions about the activities of her unloved Revenue Commissioners.

Last Thursday, Joseph Stalin would have been proud of Josephine Feehily.

She could not take questions on policy as she was an enforcer. Josephine is about to enforce one of the most draconian taxes ever imposed. Ireland's soviet-style hit squad has been charged with ensuring that no one escapes the long arm of the property taxman.

The enforcer of the property tax had a date with her interrogators. It was a doddle for her. The Public Accounts Committee (PAC) is dominated by government TDs in favour of the property tax. She had been specially chosen by Finance Minister Michael Noonan as the only person in Ireland with the ability to squeeze the last euro out of Ireland's impoverished middle classes.

No more those softly-softly local government debt collectors – they have failed abysmally to collect the household charges. This time there would be no slip-ups.

Gentle Josephine, a woman well-practised in extraction, was the business. By the time she had finished her three- hour stint at Thursday's committee, none of us was in the least doubt. There are only two (albeit extreme) ways out of paying the property tax: emigration or an early grave.

Josephine explained that she would be sending out letters to all 1.6 million house owners on March 11. Watch that date. Ireland will freak with fear when battered house owners are forced to declare the value of their homes.

In reply to questions about residents who undervalued their property, Josephine insisted that the tax authorities presumed honesty from the citizen when tax was by self-assessment.

She did not seem to recognise that many of us will take an opportunistically pessimistic view of the value of our own houses, to enable us to pay a lower sum.

If you do not play ball with her you are in big trouble. In the world of Gentle Josephine there will be no more ducking and diving. Failure to return the forms will result in endless harassment.

Confiscation will be the first line of attack. If you are an employee, you will see your wages slashed by the required amount. If you are on social welfare, your pension or welfare payments will be plundered by the State.

Alternatively, Josephine will order the banks to hand over savings from your current or deposit account. Welcome to stick-up Ireland, the land of fiscal tyranny.

If you are self-employed you will face eventual prosecution. There will be no avoiding the Revenue this time.

Oh well, we will just have to stop paying our mortgages – if we have not done so already.

It was difficult to square this soft, sometimes humorous, woman with the ruthless job that she is destined to do. She had a twinkle in her eye, the sort of bright conversation that would make her a compelling lunch companion. It was easy to envisage some of her silent male comrades starving Saint Peter, but she seemed an unlikely enforcer.

Josephine is paid €200,000 a year – more than her boss Michael Noonan. That probably makes it easier for her to inflict the brutally unfair property tax on middle Ireland. The only reluctance she admitted to feeling about the new task thrust upon her was the enormous disruption it would cause to her other plans.

She is an implementer. Collection of the €250m target in the first half-year would cost about €25.9m.

Prosecutions are big in the armoury of Revenue's enforcement weapons, yet almost unwanted, according to herself. On property tax, she insisted that prosecution had not yet even entered on to her "radar". Nor would butter melt in the good woman's mouth.

Yet prosecutions are often proudly paraded by the Revenue as a tool that they ruthlessly use against rogues. Indeed, the annual report brags about its record of successful prosecutions. Did it not succeed in scoring 1,083 convictions against citizens who had not filed ordinary tax returns in 2011?

Those who fail to fill in their property tax forms will suffer the same fate. The Revenue is very good at prosecuting soft targets for minor offences. Defaulters in the property tax jungle can expect no quarter.

Little fish are fair game. They always have been. The Revenue has form to prove it.

Was it not the same Revenue Commissioners who prosecuted many small, but often naive savers who had moved their savings offshore into non-resident accounts during the Dirt scandal?

Nearly all these petty tax evaders had been introduced to tax dodging by their personal bank managers, their trusted advisers who had persuaded them to take the illegal route.

The small guys were prosecuted, fined, named and shamed. Not a single bank manager was ever brought to book. Many remained in their jobs, untouched for long enough to fuel the mortgage carnage which we are now suffering.

I even asked Josephine how she could justify prosecutions for property tax defaulters when so many Ansbacher account holders (participants in a mammoth Irish tax scam for the rich) had been left unprosecuted by the Revenue. She admitted that not a single Ansbacher account holder had ever seen the inside of a court, pleading that they had been forced to fork out €113m in tax, adding helpfully that €67m of it was in penalties and interest.

Nearly all the Ansbacher account holders, who paid such supposedly huge penalties, are still living high on the hog.

So, why no prosecutions? Ah well , passage of time, burden of proof. . . you know the story.

It doesn't wash for a moment. In Ireland the big sinners escape, but small sinners suffer.

Josephine sits at the pinnacle of a deeply secret outfit. The Revenue Commissioners business model is unique. It is staffed at the top by a cocoon of insiders, who have been taxmen or taxwomen all their adult life. They live and breathe the unique ethos of probity, righteousness and obedience.

Josephine is not just chief executive. Like Joe Stalin, Josephine is dubbed as "chairman" (sic). She is flanked by a board of just two commissioners.

The troika of commissioners is Kremlinesque. The three oligarchs have no awkward external directors, no inquisitive independent board. There is not even a veneer of scrutiny from disinterested outsiders. The politburo is in total control.

Last Thursday evening I rang the Revenue and asked to whom the three commissioners were accountable. The official answer was that they reported to the Minister for Finance and the Public Accounts Committee (PAC).

Last week Gentle Josephine charmed her way through the annual love-in with the PAC. Her only other hurdle is Michael Noonan.

Not only is she doing his dirtiest work for him, but she knows, and he knows, and we know that Josephine will still be in situ when Michael is long gone.

By that time there will be property tax defaulters in Mountjoy prison. And dozens of reckless, retired bankers strolling the streets.

Irish Independent

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