The Revenue Commissioners will have to demonstrate greater transparency and accountability if they are to restore public confidence in the tax system, a steering group report to the Dail Committee of Public Accounts (PAC) said yesterday.

The review group, whose members included the Revenue's chairman Mr Dermot Quigley, called for radical changes in the corporate governance and management structures at the commissioners.

While acknowledging the Revenue had made advances in promoting its dual strategy of voluntary compliance and pursuing defaulters, the group said "further improvements" were needed in tackling evasion. This would have to be "continually adapted" and new internal structures would require that audit and investigation intelligence and activities be "greatly enhanced", the authors added.

"In particular, Revenue can make better use of information technology in the area of audit and investigation through computerised risk assessment and case selection systems and through improved cross-matching and interrogation of the information available to it."

The report added: "Revenue should publish overall details and analysis of all audit settlements and prominently display and comment on them in its annual report, press releases and website, while maintaining existing levels of taxpayer confidentiality."

The Revenue should also publish data showing the amount of tax charged each year, the sum collected each year and the changes achieved in the level and age-structure of the debt. Commissioned by the Department of Finance, the group's review of the Revenue followed the PAC's DIRT inquiry last year on systematic avoidance of the tax. The group was chaired by Mr Tom Considine, secretary general for public service management and development at the Department of Finance.

It was asked by the PAC to consider the possibility of establishing a Revenue Court with exclusive jurisdiction over serious tax evasion, but its seven members "were not persuaded" that the establishment of such a court alone would lead to a significant rise in prosecutions.

Stating that its extensive proposals were "challenging, but achievable", the group said implementation of most proposals should commence immediately and set a target "end date" for completion of October 2001.

The review will be sent to the Moriarty tribunal because it is sanctioned to make recommendations for maintaining the independence of the Revenue with the greatest degree of openness and accountability.

Legislation to establish a new governing board with three new non-executive directors - in addition to the three current commissioners - should be enacted "as a matter of urgency".

Before that, the group said an interim acting board should be set up immediately and its chairman should combine this role with that of head of office. "This would ensure greater openness and accountability and should help improve public confidence in the administration of the tax code."

Such a move was crucial because of the "serious challenges" to be faced by the Revenue to restore public confidence adversely affected by the DIRT Inquiry, the tribunals and other disclosures. Transparency and accountability was required to demonstrate that there was an objective and even-handed approach to all taxpayers.

A radical organisational restructuring was needed to enable the Revenue "cope better" with the demands of the modern economy and be more responsive to the changing needs of taxpayers.

"This new structure would include a significant change in the distribution of day-to-day management and operational responsibilities between the chairman and other two commissioners."

The group found the Revenue's appeal procedures "work satisfactorily", but urged its Appeal Commissioners to consider publishing an annual report. "This would be a logical extension of their ongoing initiative to publish more information on their decisions, while, of course, preserving individual taxpayer confidentiality."

The report said the Revenue should computerise the method of selecting cases for audit and base it on computerised risk assessment procedures. "Revenue should fully exploit all the relevant information available to it to inform the selection of cases for audit as well as other actions, including the choice of of enforcement options . . . it can take."