THE emergence of the black economy is a very real threat to Ireland’s economic recovery, according to the president of the Institute of Certified Public Accountants (CPA).
Gail McEvoy said that in times of recession there is a reversion to cash-based transactions, which are extremely damaging economically.
Ms McEvoy said: “The danger is that with the increase in personal taxes and income levies, the temptation will be too great and sole traders, contractors and companies will revert to cash if they think they can get away with it.
“The Revenue Commissioners must continue to target cash-based businesses as it has done in the past 12 months.
“There must be a compulsion to provide VAT invoices for services and the penalty must be severe on those who fail to do so,” Ms McEvoy said.
She said immediate steps must be taken to ensure that the ‘under the counter’ payments culture which was prevalent in the 1980s does not re-emerge.
She called on the Government to undertake an information campaign which would demonstrate the damage to the wider economy.
“In the same way that there is little or no tolerance for false insurance claims following a sustained campaign by the industry to demonstrate how such fraud impacts on individuals, a similar campaign focusing on the black economy should be implemented by Government,” she said.
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