Respect for the law is a cornerstone of any democratic society. It must be seen that crime does not pay. People who commit offences must be subject to the due process of the law. These are fundamental principles taught to every school child.
The tax amnesty announced by the Government last night for money illicitly taken out of the country and stashed in secret bank accounts abroad is, according to my estimate, the fifth occasion in not much more than five years when these principles have been breached by successive Governments in respect of large scale tax crime. There is, it seems, one law for the tax-compliant citizen and a different law — or no law — for the super-rich who commit these crimes against society.
We had, in 1988, a general tax amnesty, followed by amnesties for unpaid capital acquisitions tax, unpaid stamp duty, and unpaid PRSI. Now to add insult to injury the Government introduces yet another amnesty for tax cheats on the very same day that the Fianna Fáil and Labour Parties voted through section 7 of the 1993 Finance Bill which adds a further burden on the PAYE sector in the form of the unjust 1 per cent income levy. Is it any wonder that there is such a palpable sense of anger and frustration about this development among workers who must, week in and week out, meet their tax obligations to the community? Clearly the policy of the Government in regard to the tax obligations of the rich continues to be all carrot and no stick.
Those who will benefit from the extraordinarily benevolent approach of the Government are people who moved their money out of the country in contravention of exchange control requirements and with the specific purpose of illegally evading obligations to pay tax as required under Irish law. This is not a "victimless crime". Every pound successfully evaded in this way means that another pound has to come out of the pockets and purses of PAYE workers.
There are no sound economic arguments for "Albert's Amnesty". The country is awash with money following the inflow of almost £6 billion following devaluation, which in turn has driven interest rates to parity with or below the German rates. Whatever argument may have existed at the nadir of the currency crisis for a fiscal boost to the economy, it certainly does not exist now.
The most likely effect of "Albert's Amnesty" will be to drive up property and land prices. The typical tax cheat will find a block of flats at Mespil Road a more attractive investment than an empty factory in Galway. With exchange controls gone, the super-rich who may be interested for whatever reason in regularising their position, may move their money out again as soon as it suits them. The rate of return from indigenous industry is too weak to attract the kind of investor who is prepared to break the law in the first place to evade paying taxes. The net gain to the Exchequer is the proposed revenue windfall deriving from the 15 per cent off the top. Any pretence that it has any wider economic considerations is wrong.
Tax avoidance and evasion in this country has become almost an industry in its own right, with those who have the wealth to employ accountants and tax advisers availing of every possible device and loophole to limit or reduce their tax liability, while the thumbscrew is turned ever tighter on ordinary workers and those on social welfare. The latest amnesty will simply reinforce the culture of evasion and avoidance which permeates sections of Irish business. Why should the wealthy bother to pay taxes when they know that, if they can manage to evade paying up for a couple of years, they will almost certainly be around to benefit from one of the tax amnesties down the road?
"Albert's amnesty" is the crowning achievement of the Taoiseach's own "annus horribilis”. It is an own goal for the Cabinet who acquiesced in it and an insult to the trade union movement. Following on the 1 per cent income levy, the Greencore privatisation débâcle, the unprecedented hike in telephone charges, regrettably, it is further evidence of how quickly the Labour Party has lost touch with its own constituency. SIPTU, my own union, which has financially supported a great many Labour Deputies, has denounced any amnesty for tax cheats. Indeed today the tax officials own union, IMPACT, has described it as “an act of unpredecented irresponsibility which will undermine the stability and equity of the taxation base”.
There is no secret about the vehement opposition of officials in Revenue and the Department of Finance. I understand that their advice to the Minister was backed up by outside independent expertise. I regret very much that the Minister for Finance is not in the House but I take it that he did espouse the cause of his own officials in Cabinet because it would be a demoralising blow to the officials at the coalface who are attempting to tackle tax evasion and fight tax crime if the Minister for Finance did other than that.
Rather than wiping the slate clean for tax cheats, the Government should be tackling the shortcomings in the administration of our tax system which allows this successful level of evasion to continue. We would not have a reported £2 billion out there if there were not defects in the system. The Comptroller and Auditor General has pointed out that less than 1 per cent of those who pay under the selfassessment system have been subjected to full audit, and added that four out of five of those audited were found to be liable to additional payments.
