In her opening statement before the Public Accounts Committee last month, Revenue Chairman Josephine Feehily spoke on the shadow economy. She discussed the biggest risks for the economy and Revenue's approach and efforts to dealing with these risks. She also briefly referred to the impact of the economic environment on tax yields and business liquidity.

In her statement, the Revenue Chairman recognised that the shadow economy grows in times of recession “as people look for ways to replace lost income or profits”. In 2010 Revenue “placed great emphasis on tackling cash economy risks by a combination of risk analysis, intelligence collation, assurance checks and outdoor operations including audit and investigation”. According to the Revenue Chairman, this emphasis will continue in 2011 and while focusing on specific sectors, Revenue has already this year:

• Made over 4,700 cold calls or site visits, and nearly 3,200 assurance checks
• Completed over 1,200 audits in the construction sector with a combined yield of €37 million
• Closed 1,400 audits with a yield of €50 million in the wholesale, retail, restaurants and pubs trades combined
• Selected over 21,000 PAYE cases for intervention yielding over €13 million and disallowed credits valued at nearly €25 million

Closing her statement, the Revenue Chairman referred to lower tax yields, higher tax debt, and liquidity issues facing businesses in the current economic environment, and acknowledged Revenue's respon-sibilities which include “making repayments quickly and working with viable businesses who need time to pay”.