Cantillon: Tax tree continues to yield fruit
26 April 2013
Posted by: Author: Irish Times
Source: Irish Times
There are plenty of reasons to quake in the face of the Revenue Commissioners, with the current campaign surrounding the Local Property Tax simply the latest one. Revenue’s philosophy on the LPT is to "make the tax easy to pay but difficult to avoid”, which is a sound position and one that looks set to reap dividends for the Exchequer.
In its annual report, released yesterday, Revenue justifiably paid tribute to the job of work its staff has thus far completed in relation to the LPT – it even acknowledged its mistakes and admitted that there may be more.
The report also contained a neat vignette on how the authority typically approaches new tasks – with laser-like efficiency and an eye always trained on what might be gained for the public purse.
It details how inspectors went about the controversial business of taxing Department of Social Protection pensions in 2011 and 2012. In the first phase, this involved sending letters to some 150,000 pensioners, some 135,000 of whom ended up having a greater tax liability than had been realised. Revenue acknowledged the "distress” that may have been caused by the letters but quickly moved on to how much was gained from the investigation – a cool €65 million. "This may well increase,” the authority noted. In short, causing stress to pensioners is bad, but cash is good. It’s hard to argue.
One instance where there is no compunction about stressing out taxpayers (or non-taxpayers) is in the world of offshore assets – the tree that continues to yield fruit for the Exchequer. The latest data shows that the cumulative yield from "legacy” investigations (including life assurance and Dirt) reached €2.7 billion last year, with the amount recovered in 2012 just higher than €18 million.
This is small fry compared to the good (or bad) old days of the boom, but of particular note was the continuing inflow from Revenue’s Ansbacher investigations.
Last year, this treasure trove brought in another €3.25 million, bringing the total yield from Revenue’s Ansbacher efforts to €112.69 million from 141 cases, or close to €800,000 on average.
Every little helps.