Wednesday 22 November 2017

When it comes to tax, we're closer to Greece than we think

A lot of attention has been paid to Mick Wallace and his tax affairs but nobody who has read the newspapers over the past 30 years can be too surprised to hear that a developer cheated when it came to his taxes.

That's what many developers do and voters who elect a developer are well aware of this.

One of the other really big tax defaulters on last week's list was consultant gynaecologist Ahmed Hussain from Carrickane, Co Cavan, who made the third-largest settlement -- of €1,895,667 -- for under-declared income tax.

Mr Hussain's problems with the Revenue Commissioners are a reminder of two trends in the economy right now that will cause long-term damage to this country.

The first is the increasing number of people in some professions who are avoiding tax and resorting to the cash culture that has been a feature of many blue-collar jobs for decades.

A growing number of lawyers, dentists and doctors are now offering customers a discount if they pay cash.

With huge swathes of the population, including state employees, engaged in property tax-related evasion and many others engaged in other sorts of tax evasion, we are much closer to Greece than we think.

The second trend is the ability of the professions to so far resist the troika's calls for real reform.

Like many other doctors, Mr Hussain has been able to charge a fortune for his services during a period when medical services are being cut back. With most hospitals in crisis, we all know that reform is urgently needed. This Government came to office promising radical changes in the medical system but nothing has yet been done to make these changes.

Every single report from the troika bemoans the lack of action -- and every single time, the Government ignores the criticism and pats itself on the back for allegedly meeting targets.

The reforms appear to have fallen by the wayside; another grandiose promise that was always too ambitious to see the light of day and which will be quietly shelved.

The effect of this will be to ensure that the department that accounts for more expenditure than any other continues to offer poor services and drag down the economy by wasting a large proportion of gross domestic product.

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