Dáil Éireann - Volume 495 - 14 October, 1998

Written Answers. - Revenue Audit Scheme.

88. Mr. Finucane asked the Minister for Finance the reason the number of comprehensive audits undertaken by the Revenue Commissioners and the amount of tax recovered arising from these audits were reduced significantly [457] in 1997; and if he will make a statement on the matter. [19592/98]

Minister for Finance (Mr. McCreevy): I am informed by the Revenue Commissioners that the comprehensive audits undertaken by them and the yield arising from the audits, as set out in Comptroller and Auditor General reports, were as follows:-

Year

Number

Yield

1995

4,058

£53.10m

1996

3,969

£69.21m

1997

3,635

£60.10m

There was a reduction of 334, approximately 8 per cent, in the number of comprehensive audits carried out from 1996 to 1997. The main reasons for this are:

(i) A decision was made to advance more cases for civil and criminal prosecutions in 1997. Twelve inspectors in investigation branch were assigned from case investigation and settlements to prosecution work and to work in connection with the tribunals of public enquiry.

(ii) During 1997, 13 inspectors were deployed in servicing Revenue's commitment to the Criminal Assets Bureau, CAB, and to other compliance duties in relation to pursuing arrears of tax payments and non submission of tax returns.

(iii) Eleven experienced auditors were undergoing training on advanced auditing skills in relation to computer records for a substantial part of 1997. This resulted in the reduction in the time spent on case work and accordingly a reduction in the number of audits carried out.

(iv) A programme commenced in November 1997 to assess tax compliance in the construction industry in relation to relevant contracts tax and PAYE/PRSI. This resulted in a reduction in audit numbers during November and December 1997. The same position applies to the first nine months of 1998.

(v) It is expected that there will be a further reduction in the number of comprehensive audits carried on in 1998. This reflects primarily the concentration of auditors on more complex cases which take longer to complete. However, yield figures will not be affected as auditors are recovering more tax as a result of better targeting of cases.

The reduction in yield from comprehensive audits between 1996 and 1997 of approximately 13 per cent, or £9 million in cash terms, reflects generally the reduction of 8 per cent in the number of audits carried out. Additionally there was a reduction of £3 million approximately in the aggregate yield from the top ten yielding cases in 1997 when compared with 1996.