Mr. Niall Cody:

As I said earlier, 35% to 39% has been the rate of cases that have had an issue throughout probably the whole life of the random audit programme. It has constantly stayed at around that level. The issue around the average is essentially a presentational issue. It is the average, but it is not the norm. As I have said, 80% of the cases had a liability of less than €2,000. The outliers constituting less than 1% had a yield in excess of €50,000. The results of the random audit programme and the area in which the audit gap is really important is in how it tries to show what it is, which is that 2% figure. It is important to note that among businesses - the self-assessed community - there is a very high level of voluntary compliance with the Irish tax system. I think it is really important to think back to where it was before we had a self-assessment system, when we had bogus non-resident accounts and there were serious levels of unpaid tax. Obviously, the committee and the Comptroller and Auditor General have to focus on areas in which there are errors, omissions and mistakes. However, I think it is really important to acknowledge that Irish businesses' compliance levels are very strong. It is important to recognise the important role played by tax practitioners and advisers. In an earlier discussion, we spoke about tax planning and tax avoidance but the majority of taxpayers are just trying to get on with their business and pay the correct tax. They would rather not see sight nor sound of us from one year to the next.

The random audit programme has an average. A risk-based audit programme has a much higher average. The risk-based audit programme has a yielding of 68% as opposed to 39%. The average yield is €52,000. The average yield per yielding audit is €75,000. What we try to do and what the Comptroller and Auditor General recommends is that we carry out more risk-based audits. To make the right intervention in the right case, with regard to the risk, is what we are keen on. What I am really interested in doing over the next couple of years is carrying out more detailed investigations of serious evasion cases. Less of them are done because they take time and are not sorted easily. I agreed in part with the recommendation because I believe that we should do more intensive investigations, though they might be less in number, if that makes any sense. It is about how many person hours, man hours or officer hours that we engage in detailed risk-based programmes.

That is why the other issue mentioned in the budget speech is around changes and proposals around offshore evasion that I hope are being introduced in the finance Bill next week. The Minister announced in the budget that we were going to remove the opportunity for disclosure from 1 May for people who have engaged in serious tax evasion using offshore facilities. What that will mean is a serious increase in the level of penalties as well as the introduction of a strict liability offence for people who have engaged in it. The audit gap is useful. We have committed to work with the Comptroller and Auditor General to improve it, but what we really want to do is make the intervention that is appropriate to the taxpayer's behaviour. Because of our technology, our third-party reporting, what is coming down the tracks in the international exchange of financial information and what happens with things like the Panama papers, HSBC or LuxLeaks by which information comes into the public domain, the environment for serious tax evasion is going to get a lot chillier. Those are the things that we have to balance.