Revenue struggles to claw back €1.4bn in unpaid tax
REVENUE is struggling to claw back €1.4bn in outstanding tax as cash-strapped businesses and ordinary workers struggle to pay their bills.
The level of unpaid tax has soared by 17pc in just one year, Revenue's annual report reveals.
It also shows some €221m in outstanding tax has been written off after being declared "uncollectible".
The amount being written off rose by 72pc last year, mainly due to companies being liquidated or put into receivership. Outstanding tax grew from €1.2bn in 2008 to €1.4bn last year, or 2.8pc of taxes collected. Tax outstanding for three years now amounts to €366m.
Revenue said the economy and companies were in major "financial distress" with difficult trading conditions, cashflow pressures and limited bank credit.
The amount of tax owed is set to climb further. "The scale of the tax challenge arising from this is very significant," the report said.
Even in the first quarter of the year the amount of outstanding tax was up 33pc. Revenue said it was trying to strike a balance between helping struggling businesses and protecting the tax base.
"We have no desire to use the full weight of enforcement powers against innocent victims of the recession, or to drag them through the courts," it said.
To avoid this happening taxpayers needed to "engage with us honestly". Revenue said it could not act as a lender to a business in difficulty. Total net receipts for 2009 came to €33.28bn, down €7.79bn, or 19pc, from the previous year, with capital gains tax and stamp duty plunging the furthest.
Revenue is managing to get more money from audits. It also disclosed that it had taken in €76.3m from the crackdown on undeclared money in deposit accounts. Revenue secured 15 convictions for serious tax evasion in 2009.