An Saoi: The Revenue Commissioners get off lightly in McCarthy’s Report. It is suggested that savings of around €26M could be made. However as €8.6M of that relates to a computer project (e-stamping) which is coming to a conclusion by year-end anyway, it seems surprising that it is included.
Much of the balance of the proposed savings are littered with “could”, “would” and “should” and show little understanding of the Office’s operation, with the exception of reducing the number Revenue’s offices. However, many of the offices he wishes to be closed were opened up in recent years at the behest of Mr. McCarthy’s paymasters!
While considering a possible response, I came across an excellent short report produced by an IMF employee, Mr. John Brondolo, called "Collecting Taxes during an Economic Crisis: Challenges & Policy Solutions”, published on 14th July 2009. This of course explained Mr. McCarthy’s ignorance on the subject – he never got a chance to read Mr. Brondolo’s report!
While Mr. McCarthy calls for staff reductions of a further 350, or approximately 5%, (this is after a reduction of 350 already), Mr. Brondolo points out, “Sustaining revenue collection over the medium term will require tax agencies to address their most fundamental weaknesses (e.g., poor organisational and staffing arrangements, weak taxpayer services and enforcement programmes ,and outdated information systems).” (page 9) Also on Page 17 he refers to the need to, “implement proper organisational and staffing arrangements for collection enforcement...”
He makes reference to the need for tax authorities to develop their services to assist taxpayers but not to take the eye off the ball by reducing enforcement and audits. He points out – which every person ever involved in collecting debts knows – that once arrears exceed 90 days, success of collection falls dramatically.
The report provides more than enough reasons to allow the Revenue to go out into the jobs market and recruit many of the unemployed accountants now available. But, rather than continuing to read me further, read the report!