Ms Josephine Feehily:

As the Comptroller and Auditor General has outlined for the committee, the chapters under consideration today touch on all important key performance indictors and output measures in regard to tax collection and taxpayer compliance. The issues covered include the receipts for 2011 and trends in collection since 2007, outstanding tax debt and write-off, taxpayer compliance and measures to deal with non-compliance.

In regard to tax receipts, these increased by €1 billion in 2011 and by a further €2.6 billion in 2012, reversing the downward trend of the 2008 to 2010 period. Not surprisingly, outstanding tax debt increased rapidly from 2000 onwards given the economic climate but the negative trend in this area has been reversed in the past two years and the debt has declined by €127 million since 2010.

Revenue has a strong focus on making sure that everyone complies with tax obligations by filing the required tax return and paying the right amount of tax in a timely manner. Our overall strategy is to influence compliance behaviour by making it as easy as possible for people to comply. This is international best practice among tax administrations, that is, that making it easy for comply with tax obligations encourages compliance. It also helps to reduce the cost of compliance for the taxpayer.

In terms of risks, avoidance and aggressive tax planning represent a constant challenge and there are very specific risks also in regard to excise. Also situations where individual or businesses have the capacity to operate with cash need particular attention from us because we recognise that in times of recession, people look for ways to replace lost income or profits. Last year, we focused much of our audit activity on a wide variety of such cash businesses, ranging from the entertainment sector to white collar professionals, and we will continue this focus in 2013.

As part of a targeted approach to tackling oil laundering, we rolled out a new legal framework for that sector followed up with a new IT-based oil movement system, from which the first returns are due very shortly.

Tax non-compliance is serious and where there is sufficient evidence to support a criminal court case, the matter may be pursued by our dedicated investigation and prosecution division.

Last year we collected €36.7 billion for the Exchequer, €21 million more than projected. This year we have a more significant challenge, with a somewhat higher target of €38 billion and a new local property tax to introduce in an environment that remains challenging for Revenue, for business and for taxpayers.