Revenue’s game-changer for tax administration
As we have discussed recently, the Revenue system has been undergoing massive amounts of welcome changes in recent years. As Revenue continues to invest in the future of their systems, how we do business daily is likely to shift along the way.
Revenue have become increasingly advanced and sophisticated in their systems over the past couple of years and their systems will continue to evolve. Where tax administration was once a long and protracted process, Revenue have managed to create a game-changing and more sophisticated system to catch non-compliance by investing in their IT and data analytics in a much more streamlined fashion.
“A system is only as good as the information it runs on – Revenue’s ability to collect vast and detailed information, as well as its ability to sort and collate this into useful data means their vigilance and efficiency is increasing year on year,” says Cian Rowlands, a tax manager in Ecovis DCA.
Revenue’s recent focus on the area of data analytics allows them to follow a more risk-assessment-based approach to tax issues with one leading tax commentator noting:
“Revenue have become much more advanced and sophisticated in its use of analytics and e-audits in recent years. Taxpayers can see it for themselves when they are filing returns and paying their tax online.
Revenue is now better positioned to tackle non-compliance. It is using data to determine which returns are higher risk and realigned its operating structure in 2018 to complement that. Revenue is focusing its resources on those cases which it believes will most likely deliver a yield on an audit.”
Revenue now utilises a risk-evaluation tool called the Risk Evaluation Analysis and Profiling (REAP), which is a highly sophisticated system that takes data from numerous sources and cross-checks this data against tax returns filed in order to attribute a risk ranking to the individual. Higher risk individuals are more at risk of being selected for audit.
This system continues to advance, and Revenue continues to refine the process. This increased sophistication means that Revenue can now carry out digital audits on an individual if an issue is flagged. As well as this, Revenue’s appeals system has been streamlined recently to begin to clear the backlog caused by the pandemic.
We hope that this information has been useful for you and as always, please don’t hesitate to contact us here at EcovisDCA where we remain open and ready to help. Please do not hesitate to contact us.