The first days of Revenue in independent Ireland
21 February 1923, six months after his death, the wish expressed in Michael Collins's last known letter materialised. On that date his objective of an organised body to collect the State's revenues got final approval when Government Order 2/23 became law. Setting up the Office of the Revenue Commissioners, Order 2/23 stated there would be a single Board of Revenue Commissioners. Consisting of three Commissioners, one of whom would be Chairman and Accounting Officer, the Board would have its chief office in Dublin.
William O' Brien, a native of Cappamore, Co. Limerick, was appointed first Chairman. Charles Joseph Flynn and William Denis Carey were nominated as the two Commissioners. Both Commissioners were Corkmen. All three had backgrounds in either the UK Inland Revenue or Customs & Excise Services.
The Order stated that the Revenue Commissioners shall, in the exercise of their duty, be subject to the control of the Minister for Finance and shall obey all instructions issued to them in that behalf by the Minister. On 31 March, 1923, the Minister for Finance further clarified the role of the Revenue Commissioners, as follows:
"While the Revenue Commissioners will be responsible directly to the Minister for Finance for the administration of Revenue Services, the Commissioners will act independently of Ministerial control in exercising the statutory powers vested in them in regard to the liability of the individual tax payer."
This position was reiterated by Ministers throughout the years in various Oireachtas debates.
The mandate of the Office of the Revenue Commissioners was to carry out all the functions previously exercised by the Commissioners of Inland Revenue and the Commissioners of Customs & Excise in the area of the State. This brought all revenue collection under a single Board. Earlier Government debate had rejected proposals of separate Boards for Inland Revenue and Customs & Excise.
Before the new Office of the Revenue Commissioners could function, large scale adaptations of UK revenue legislation had to be carried out. Legal effect was given to laws enacted before the Treaty, provided they were not repugnant to the Constitution of Saorstát Éireann. In effect, most legislation required to raise taxes and duties was carried forward from the UK administration. Likewise, the commodities or services attracting duties or taxes did not change. The legal mechanism necessary for all of this was quickly implemented and deemed to take effect from 01 April 1923. The War of Independence followed by the Civil War had wreaked havoc with the country's finances. Survival of Saorstát Éireann was dependent on the collection of taxes and duties on the Exchequer.
The main areas of revenue collection in the fledgling State were:
- Customs duties on imported goods
- Excise duties on beer, spirits, tobacco, wine and hydrocarbon oils
- Licences for publicans, brewers and distillers
- Income Tax and Super Tax
- Estate Duties and Stamp Duties.
The Board, the legislation and tax heads were put in place. But what of the professional expertise necessary to ensure that the changeover of revenue collection took place as smoothly as possible? Article 10 of the Treaty gave civil servants the option of transferring to Saorstát Éireann or remaining with the UK administration. Within Revenue, many Irishmen opted to transfer. These included Bill McGarry, one of the few surviving transferred officers, who in time would become Chief Inspector of Taxes. Another was the late Maurice Walsh, later to gain international fame as an author. From Lisselton, near Listowel, Walsh had entered the UK Customs Service as an Excise man or Gauger in the 1890s. A condition of the Treaty guaranteed certain rights of salary and conditions to officials, like Maurice Walsh and Bill McGarry, transferring from the UK administration. These rights were for a seven year transition period. This made the transfer even more attractive.