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Ireland: Tax and fairness

29 August 2014   (0 Comments)
Posted by: Author: The Irish Times
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Author: The Irish Times

The decision by Minister for Finance Michael Noonan to deny the Revenue Commissioners permission to hire additional audit inspectors, who were each expected to raise €800,000 in undeclared taxes, interest and penalties, raises questions about the Government’s commitment to tax compliance, not to mention equity and fairness. In turning down the request, Mr Noonan followed a pattern set by his predecessors, whose reluctance to counteract tax evasion provided fodder for various tribunals.

As the economy recovers and Government ministers meet to consider taxation and spending measures for the coming Budget, this is an issue that should be revisited. Revenue estimated the employment of an additional 125 auditors would provide a return on investment of between 12 and 15 to one.

And while the additional yield might not be immediately available because of training requirements, the message for non-compliant taxpayers would be unambiguous. Just as legislation and enforcement measures affecting white-collar crime have been woefully inadequate, the treatment of well-heeled tax evaders has followed suit. If the Government really wants a more inclusive society, tax evasion should rank in importance with the prosecution of welfare fraud. Poverty and compliance should be tackled.

The work of Dr Michael Collins of the Nevin Economic Research Institute may inform Government deliberations in that regard. His research found that, when all taxes – direct and indirect – are taken into account, the very wealthiest and the very poorest households surrender thirty per cent of their gross incomes to the Exchequer. The so-called "squeezed middle” are not so squeezed after all. In spite of well-articulated complaints, they pay less than 20 per cent of gross incomes. Reducing the impact of indirect taxes on welfare recipients may not be politically attractive, when compared to income tax cuts for those at work, but a fair Budget should pay attention to this issue.

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Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.


The Act requires that a minimum academic and practical requirments be set to register with a controlling body. Click here for the minimum requirements of SAIT.

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