Richard Bruton (Dublin North Central, Fine Gael)

I thank the Minister for his reply. Based on the report of the Comptroller and Auditor General, it is hard to share the Minister's confidence that this issue is under control. In the report, the Comptroller and Auditor General took a small sample in the large cases division of the Fingal and Cavan/Monaghan districts. The report found that on the RCT system, 49% of contractors had submitted returns late, 12% had made no tax deductions where deductions clearly needed to be made, and returns were not all being examined because of pressure of work. There was also clear evidence of the continuing problem where people are being returned as sub-contractors even though they are employees, which is not an acceptable practice. Only 12 cases of fraud were uncovered and it seems that only person has suffered a penalty and that was a community service order.

It strikes me that there is significant evidence of non-compliance. The building industry would probably raise between €10 billion and €12 billion in tax revenue, so non-compliance has major consequences for the Exchequer. It is not reassuring to find that the risk evaluation ordered by the Comptroller and Auditor General after his report in 2000 has not yet been examined by the Revenue Commissioners. While there are obviously builders and contractors who are abusing the system, there are many who are trying to be compliant. It makes it very hard for compliant builders to compete if others are actively engaged in non-compliance on the scale that the Comptroller and Auditor General's report suggests.

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