Taxman owed €13.5 billion from last year

The figure is an improvement but the taxman still is owed €5.5 billion in VAT from last year which, plus uncollected income tax and corporation taxes, adds up to €13.5 billion.

The tax take rose in 2014 to record levels, in part due to increased VAT collections, but the year-end national accounts show a gaping hole in the country’s financial position despite the Tax Authority's increasing use of coercive collection methods which yielded €1.147 million last year.

The Tax Authority also is under pressure following the VIP Taxpayers List scandal where a register of special people including top politicians had their tax records protected by an illegal alert system should a taxworker access any of these files.

Two senior managers departed from the Tax Authority, and the Secretary of State for Fiscal Affairs Paulo Núncio asked for a full report and recommendations to ensure tax records were protected and all taxpayers were treated equally.

Reports have been submitted to the Tax Authority on the VIP List affair but there has been no news of disciplinary proceedings.

A new 30 point plan has been released by the Tax Authority to protect the confidentiality of tax payers. The implementation of measures will take until the first quarter of 2017 and will cost the public purse an eye-watering €5 million.

The plan refers to ‘raising awareness of tax secrecy, the increased training of employees and external agencies and a greater effort to disclose all matters concerning security and confidentiality.’

In addition to this waffle, there were some concrete actions, many of which were assumed already to be in place in a computerised tax system that everyone thought was modern and fit for purpose.

In the short term, priority will be given to ‘reviewing existing access profiles’ so before accessing taxpayer records, the taxworker will be required to log the reason why he or she needs to see that data. The taxworkers union leader Paulo Ralha says this system already exists.

The Tax Authority aims also to review all access passwords and to make sure the passwords of former employees have been deactivated, a startling admission that this has not been happening in the past.

The 2,300 external users that have access to the nation’s tax records will be reviewed by the Data Protection Commission with the aim of reducing this number.

By the end of 2015, the Tax Authority is 'committed to reviewing the information exchange agreements with external bodies and agencies, such as local councils and the Institute for Employment, and to review the terms and conditions covering confidentiality in contracts with outsourced companies.'

In a possibly futile attempt at putting the public at ease and persuading them that their tax records are confidential and not able to be accessed for no good reason, taxpayer information will be ‘audited periodically by the General Inspectorate of Finance,’ the same body that failed to spot the VIP Taxpayers List existed.

Only by the end of 2016 or the first quarter of 2017 will all this be completed along with 'a revision of the user management system; tracking external bodies that have access to records, and the implementation of controls and access monitoring systems.'

The document released today by the Tax Authority fails to mention any disciplinary proceedings resulting from the VIP Taxpayers List affair even though the Finance Inspectorate recommended that four people should be called in to explain themselves; António Afonso Guerreiro, José Maria Pires, Graciosa Martins Delgado and José Oliveira Morujão all of whom still are gainfully employed despite the high probability that they were involved in setting up the VIP Taxpayers List and in the subsequent attempts to cover it up.

What has become clear is that the Tax Authority systems needs work.

Whether €5 million is an accurate extimate or not does not hide the fact that gaping holes in confidentiality have been allowed to develop, an illegal VIP List was allowed to run unchecked until the press got wind of it, and the Tax Authority management has been made to look foolish and dangerously out of control.

The coercive tax collection yielded to the coffers of the State 1,147,500,000 euros last year.

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