Peadar Tóibín (Meath West, Sinn Fein)
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Question 181: To ask the Minister for Finance the cost to the economy in terms of employment of tax evasion and avoidance. [35954/11]

Michael Noonan (Limerick City, Fine Gael)
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I am advised by the Revenue Commissioners that it is not possible to estimate the cost to the Irish economy in terms of employment due to tax evasion or avoidance. The measurement of the scale of tax evasion, often referred to as the shadow economy, is inherently difficult given the nature of the problem. There is no one internationally recognised and agreed measure, nor are there agreed measures to estimate the consequent cost to employment of the shadow economy. There is no doubt that shadow economy activity and aggressive tax avoidance create distortions in the economy and competitive disadvantages for compliant businesses. For these reasons, Revenue focuses on deterring shadow economy activity and non-compliance through its audit and investigation programmes based on risk analysis, use of Revenue powers and their intelligence and information systems.

Revenue fully recognises the need to tackle tax evasion in all its forms, and consequently has an increased focus on sectors that have the potential to operate using cash. Last year Revenue carried out 11,066 audits resulting in a yield of €440.46 million.

Revenue continues to identify and challenge aggressive tax avoidance schemes and unintended use of legislation that threaten tax yields and the perceived fairness of the tax system. In general, tax avoidance is tackled by reviewing and amending legislation where there are perceived loopholes and by challenging individual cases. The introduction of a Mandatory Disclosure Regime in January 2011, which placed obligations on Promoters of certain tax-avoidance transactions to disclose them to Revenue, is designed to act as an "early warning system" to help tackle such schemes.