More random audits aim to catch tax dodgers

A MAJOR increase in random tax audits was signalled by the Dáil’s Public Accounts Committee yesterday as it expressed concern at the number of fraudsters currently slipping through the net.

Revenue Commissioners will be pressed on the matter when they come before the influential Oireachtas body next week.

The State’s financial watchdog told the PAC that random audits had produced a yield in nearly one third of the 400 cases probed.

PAC chairman Michael Noonan said the clear lesson was that self assessment is open to abuse unless people feel there is a real danger of their financial activities being randomly looked into.

The Fine Gael TD welcomed the Finance Department’s acceptance of past PAC recommendations in this issue, but added the system needed to be deployed on a wider scale to act as a deterrent to cheats.

“Self assessment does not work unless those being assessed feel there is a chance they will be audited.

“It’s interesting that when the Revenue return to random audits that 30% of the sample that they audited had a liability. That is a very high tax liability. So we will be urging them to do additional random audits at next weeks meeting,” he said.

The PAC also warned attempts by the Justice Department to cut the level of sick leave by prison officers could result in an even bigger financial burden for taxpayers.

Comptroller and Auditor General John Purcell noted that the assumption by the Prison Service that sick leave would be slashed by a third following the switch to an annualized hours system for prison staff has yet to be achieved. The Justice Department moved to clamp down on sick pay after the Prison Service overtime bill hit €45.4 million in 2004 and covering for staff off sick accounted for €8.6m — some 19% of that.

The average number of days lost to sick leave per prison officer that year was 23.88.

Mr Noonan said the effectiveness of the new procedures had not yet been proven and would require close monitoring.

“We could up with the worst of all worlds with a new annualised system at additional cost and then discovering the system hadn’t reduced the overtime,” Mr Noonan added said.

The CAG said the lack of co-ordination that led to costs for the refurbishment of Cork Court House soaring had now been taken on board by the Courts Service. Mr Purcell added that responsibility for the project “fell between two stools” when the service took over from the local authority and costs and delays were increased.

“Because of that delay the courts had to find alternative accommodation and Cork city rented out a property for two years and when the OPW went to extend that rental, the best they could do with the landlord was to get a nine years and 11 months lease at around three times what Cork City Council was paying,” he said.