Dáil Éireann debate -
Wednesday, 30 Jun 1993

Vol. 433 No. 2

Waiver of Certain Tax, Interest and Penalties Bill, 1993: Second Stage.

Minister for Finance (Mr. B. Ahern)

I move: "That the Bill be now read a Second Time".

This Bill contains the legal provisions for what has been colloquially termed the "tax amnesty". The objectives of the amnesty scheme are to provide those who failed to meet their tax obligations in the past with a final opportunity to regularise their affairs, in advance of the introduction of more stringent penalties for tax fraud, and the ongoing intensification of Revenue's compliance programmes; and to secure, at the same time, the highest possible proportion of undisclosed liabilities from the period prior to April 1991, bearing in mind that such evasion is difficult to detect at this remove.

A further aim of the scheme is to facilitate the deployment of those funds relating to tax evasion, which had hitherto been held dormant, whether at home or abroad, for purposes of general benefit in terms of contributing to economic activity and employment.

There is a fundamental difference between the type of amnesty for which this Bill legislates and the interest and penalties waiver arrangement operated in 1988. While in its own terms, the 1988 scheme was an unqualified success, the great bulk of the proceeds related to the clearance of arrears. It is quite clear from the figures that very few new cases came on record, and, therefore, that the amount of previously unknown income on which tax was paid was quite limited. New tax-head records were set up in no more than 1,000 cases, and, of those who availed, only 366 individual taxpayers and 13 companies were not previously recorded by Revenue under any tax head. To put these figures in perspective, while an exact figure for the number of taxpayers who availed of the 1988 scheme cannot be derived, there were some 170,000 inquiries to Revenue about that scheme. The number of payments received by the Collector-General in that year was some 357,000 more than in 1987.

This present amnesty has been framed with a particular focus on the liabilities from the pre-1991 era which are not on the record — whether because the people concerned had successfully concealed the full extent of their income in the pre-self assessment era or had entirely escaped the tax net. Previous experience strongly suggests that simply offering an interest and penalty waiver to such people would not entice them to bring their affairs up-to-date. Notwithstanding the very considerable improvement that has been brought about in tax-compliance over the past few years, through the shifting of more Revenue resources into compliance work and the more stringent legal framework progressively put in place, it would be unrealistic to expect that those who in the past successfully evaded taxes, and have escaped full detection for a lengthy period, would be prepared to cough up in full under amnesty. To seek to insist on the payment in full of the tax liability on such undisclosed income, bearing in mind that the marginal tax rates applying until the mid-eighties were very high, would mean that very little of such income would be brought forward. It was in recognition of this reality that the Government decided that a lesser charge was an essential feature of any scheme aimed at bringing these people within the tax net.

First of all, I will give a broad outline of the scheme and then deal in some detail with particular features as set out in the Bill.

The overall amnesty scheme covers the generality of undischarged tax liabilities in respect of the period up to and including 5 April 1991. There are certain exceptions designed to protect the yield from ongoing Revenue enforcement activities to the fullest extent possible. Otherwise, it extends to all arrears of such taxes, comprising both liabilities in respect of previously undisclosed activities and other amounts unpaid. Liabilities for social insurance contributions are not covered by this scheme. They fall to be dealt with under the parallel amnesty for social welfare already announced by my colleague, the Minister for Social Welfare, full details of which will be made available by him in due course.

I must emphasise that the benefits of the amnesty scheme are available to those only who regularise the totality of their pre-1991 tax affairs. A basic condition of the scheme is that applicants must discharge, under the scheme or otherwise, their outstanding liabilities for the relevant period under all of the various tax headings covered by the overall scheme.

Moreover, there is a further requirement to make a timely return with full disclosure in respect of the latest tax year. An individual, to retain the benefits of either tier of the scheme, must deliver by 31 January, 1994 a correct return of income for the 1992-93 tax year. An equivalent condition applies in the case of a company. This requirement is directed at ensuring future compliance, especially by persons who avail of the incentive scheme. Unless they come fully within the tax net and keep their affairs in order, they will be exposed to very severe sanctions. Failure to fulfil this requirement will lead to a withdrawal of the benefits of the scheme.

The scheme has two distinct tiers. The innovative features are in the first tier which, for convenience, I will refer to as the "incentives amnesty". The core provisions for this tier are set out in section 2 of the Bill, which must, of course, be taken with definitions in section 1. This relates to outstanding tax, levy and health contribution liabilities on income or capital gains and it applies only to individuals. Persons seeking to avail of this tier must indicate the total amount of the relevant income and gains, pay 15 per cent of that amount and make certain declarations. Subject to the validity of these declarations, including full disclosure of such income and gains, the applicants' tax liabilities in this respect will be considered fully met. Also, any penalties or interest that might arise will be waived. Applicants who fully comply with these requirements can be assured that their pre-1991 tax affairs will not be the subject of further Revenue pursuit or investigation.

The second tier closely resembles the amnesty scheme operated in 1988 and I will refer to this as the general amnesty. The main provisions for this scheme are in section 3. As in 1988, this tier of the scheme also extends to companies. This provides, where the relevant tax liabilities are paid in full by a specified date, for the waiver of all related interest and penalties. This general scheme covers, as well as the foregoing personal taxes, capital acquisitions tax, residential property tax, stamp duties, value added tax — in respect of both sole traders and companies — corporation tax and corporation profits tax and liabilities of employers in respect of PAYE. Applicants under this tier, unlike the incentive scheme, will have to provide the normal returns required in respect of the various tax headings, giving a year by year breakdown of the relevant amounts. This general amnesty will apply to individuals availing of the incentive scheme who have relevant liabilities for the other taxes covered by the general amnesty. It will also apply to persons without outstanding liabilities on income or gains.

The Government has decided that, in order to give maximum assurance to those availing of the incentive amnesty scheme to bring their pre-April 1991 tax affairs into order, a special confidential application procedure is appropriate. Accordingly, applicants for this tier will only be required to reveal their identity to a special unit within the Office of the Revenue Commissioners. The staff of this special collection unit will be obliged to respect absolutely the anonymity of applicants. There are penalties for breaches of confidentiality, whether to the public at large or to the general Revenue staff. The staff of the special unit may, however, confirm the validity of certificates of moneys received under the amnesty which will be issued by the special unit, but this will only arise where the individual concerned has already acknowledged to Revenue that he or she has availed of the incentive scheme. Furthermore, as there is likely to be a close connection in practice between non-disclosure of VAT liabilities and the evasion of income tax, an individual who avails of the first tier can apply to the special unit also in respect of his VAT liabilities. However, the requirement that there be a full discharge of those liabilities applies as in the general scheme. Alternatively, VAT can be discharged to Revenue in the ordinary way under the general amnesty.

Those seeking to avail of the general amnesty otherwise must, as was the case in 1988, apply to the Revenue Commissioners in the normal way. In this instance the full tax due must be paid, but any interest or penalties arising, except those resulting from court proceedings, will be formally waived. Obviously, where such a person has reached agreement with the commissioners in respect of these liabilities, the question of further pursuit will not arise. Of course, it will be required that full declaration be made under the amnesty.

Section 4 provides for the withdrawal of the full benefits of both tiers of the amnesty under sections 2 and 3 in certain circumstances. Such withdrawal will be made where: in the case of an individual, a correct return of income for 1992-93 is not delivered on time; in the case of a company, a correct return for any accounting period ending in the year to 31 December 1993, is not delivered on time; any declaration given by a taxpayer to the chief special collector under section 2 or 3 is proven to be false; and the amount paid by the taxpayer, under any tax heading, under the general amnesty was less than the full amount of arrears due by him or her.

The legislation provides for clear deadlines for application for the amnesty and for the making of the payments required. In framing these deadlines I have taken into account the position that, where tax arrears over a number of years have to be brought to account, a reasonable time period is appropriate.

For the incentive scheme all applications must be submitted not later than 30 November 1993. Every such application must be accompanied by the prescribed declarations and in particular specify the relevant amounts of income and gains for which amnesty is sought. The deadline for the associated payments is 14 January 1994. This period of grace for payments, as distinct from declarations, is intended to facilitate those needing to liquidate assets.

For the general scheme the requirement is that outstanding tax liabilities in respect of the relevant period be brought fully up to date by 14 January next. Any applicant for the incentive scheme with other undischarged tax liabilities must avail of this general scheme to clear these liabilities.

Deputies will appreciate that if the scheme is to operate as intended it is necessary that those availing of the scheme must have a means, should the need arise, of establishing that fact and of proving the amounts they presented. An individual who by the appropriate date provides the declarations required for the incentive amnesty and makes the payment required will be provided with certification both of having availed of the scheme and of the relevant amounts. The form of certification will be prescribed in due course by the Revenue Commissioners with the consent of the Minister for Finance following the enactment of the Bill.

In order to protect Revenue's ongoing enforcement and collection programmes, there are a number of exclusions from the scope of the 15 per cent amnesty. The incentive amnesty is not available to individuals who, on 25 May 1993 — that is, the date of announcement of the amnesty — were the subject of investigation or inquiry by Revenue in respect of tax liability for the period to 5 April 1991 and had been notified in writing of the position.

The following amounts of tax are also excluded from the scope of the incentive scheme: tax already at enforcement stage on 25 May last — this covers cases with the sheriffs, cases where court proceedings have been initiated and cases which are the subject of a notice of attachment; tax which on that date was under appeal; tax which on that date had been agreed with an inspector but had yet to be paid; and tax not paid by virtue of an avoidance scheme which would otherwise have been payable on or before 25 May. Neither is the incentive scheme available to individuals with undisclosed, or undischarged, liabilities deriving from an illegal source or activity; but for this purpose evasion of taxes and breaches of the exchange control provisions will be disregarded. However, the general amnesty, whereby interest and penalties will be waived on full payment of the tax due, will apply to these excluded amounts of tax. Individuals excluded from the incentive scheme are also covered by this general amnesty.

The Bill provides for specific declarations to be made under the scheme to the special collector by applicants for the incentive amnesty. They are required to provide, firstly, a full and true declaration of the respective amounts of income and chargeable gains coming within the terms of the scheme; and, secondly, a declaration that none of these amounts arise from any illegal source or activity, with the exception of tax evasion or a breach of the exchange control provisions. Moreover, an equivalent declaration to the first of these must be given in respect of VAT arrears where these are remitted to the special unit.

Where either of these declarations is proven to be false the benefits of the scheme will be withdrawn. However, credit will be given against the full tax then due for the payment made under the scheme. It is clear that certain assurances in relation to Revenue investigations into tax affairs of the relevant period are essential to the uptake of the scheme. The legislation therefore provides that should the Revenue Commissioners, in the course of their ongoing normal audit and inquiry programmes, seek to inquire into the pre-April, 1991 affairs of a person who has availed of the incentive amnesty, this person may challenge the commissioners' right to pursue such an investigation.

Section 5 provides that an inspector or other Revenue official will in certain circumstances be precluded from commencing an investigation in respect of tax which has been paid by an individual to the chief special collector for any period covered by the amnesty. Because of the special confidentiality rules applying to the 15 per cent amnesty, Revenue officials outside the special unit will have no way of knowing who avails of the amnesty. An individual who avails of the amnesty can block any investigation by Revenue into taxes covered by the incentive amnesty if he produces within 30 days a certificate of receipt from the chief special collector in respect of the liability to tax to be investigated. Revenue will be prohibited from pursuing such an investigation further unless it can show to the satisfaction of the appeals commissioners that any declaration made by the individual to the chief special collector under section 2 or 3 was not a full and true declaration of the amounts of his or her undisclosed income or chargeable gains, or the amount of value added tax contained in the arrears of tax paid, as appropriate.

Section 6 provides for the situation that where an individual had received or receives a demand for an amount of tax which has been discharged under the amnesty to the chief special collector, including VAT remitted to the chief special collector. The demand will be withdrawn on production by the taxpayer of evidence that he or she has availed of the amnesty. The relevant evidence must be produced within 30 days of receipt of the demand or, if later, of the date of receipt of the certificate from the chief special collector.

Section 7 contains the special confidentiality provisions which the Government consider to be necessary in the special circumstances of the scheme. These ensure that persons who avail of the amnesty can do so in the assurance that the "special collectors", who will administer the incentive amnesty, will be bound by stringent requirements in that respect, over and above the rules which govern all Revenue staff to respect the privacy of taxpayers. Revenue officers assigned as special collectors will give a permanently binding undertaking, in the form of a "declaration of confidentiality", that they will not disclose any information obtained in the course of administering the amnesty. In general, no Revenue officer other than a special collector will have any involvement in, or any access to, information on the affairs of individual applicants arising from the administration of the incentive amnesty. Special collectors will be under the control and direction of a special collector, to be known as the chief special collector, who will have responsibility for the confidential administration of the incentive amnesty.

The section provides for only the most limited and necessary exceptions to the prohibition of any disclosure of information by special collectors. Special collectors may, if requested to do so by a Revenue officer, confirm or deny, without any elaboration, the validity of a certificate, or evidence of a certificate, produced to the officer by a person availing of the amnesty. The Comptroller and Auditor General and the Accounting Officer of the Revenue Commissioners are to be given such information as they may reasonably require to check that the amnesty has been correctly administered. The Comptroller and Auditor General and the Accounting Officer may use any information they receive from special collectors only for the purpose of ensuring that the amnesty is administered correctly and for no other purpose. Should a special collector disclose confidential information in any circumstances, other than the exceptional cases provided for in this section, he will incur a penalty. The results of the amnesty may only be communicated to the Minister for Finance or the Revenue Commissioners in the form of aggregate results.

Section 8 ensures that any payments made to the chief special collector will be payable to the Revenue Commissioners and lodged confidentially, along with all other payments to the Commissioners, in their general account in the Central Bank. Specific and severe penalties are provided for persons who, having failed to meet their obligations for the period covered by the amnesty, then ignore the incentive amnesty, or abuse it by making less-than-full disclosure under it. Section 9 provides that an individual who abuses or ignores the amnesty by failure to make or by falsely making the appropriate declarations and who, in respect of any years covered by the amnesty, has either failed to make returns or has submitted false returns, will be guilty of an offence and liable to a term of imprisonment. If such an individual is summarily convicted, the term of imprisonment can be up to 12 months. Where the conviction is on indictment, the term cannot exceed eight years.

Any person seeking to avail of the incentive amnesty in respect of income or gains arising from illegal activity will, irrespective of whether previous tax evasion is proven, be liable to up to eight years of imprisonment.

The Bill provides for new and increased penalties for future non-compliance with the tax code. Section 10 limits the possibility of mitigation of certain fines and penalties under the existing legislation which governs such mitigation. At present the Revenue Commissioners or the Minister for Finance can, after a court has made a judgment, remit the level of a fine or penalty to any extent, including remitting the fine or penalty entirely. From now on in such circumstances these authorities will only be able to remit to the extent of 50 per cent of the amount of the fine or penalty. Moreover, in cases where the amnesty has been abused or ignored, no mitigation will be allowed.

Section 11 provides that, as respects tax offences committed after the passing of this Bill, a taxpayer who files a false return etc., or makes a false claim for an allowance or a relief etc., or a person who assists a taxpayer to file a false return or to suppress sources of income, will be liable, on summary conviction, to a term of imprisonment not greater than 12 months and, on conviction on indictment, to a jail term of not more than eight years.

Section 12 brings the appropriate declaration under section 2 or 3 within the scope of sections 500 and 501 of the Income Tax Act, 1967, which relate, respectively, to failure to make a return and to the making of an incorrect return, for the purposes of civil proceedings for penalties. The penalties are £750 for failure to give the appropriate declaration and, in respect of an incorrect declaration, £100 plus an amount equal to the sum of the unpaid taxes.

Finally, the Bill also provides for easier access by the Revenue Commissioners, where tax evasion is suspected, to information in financial institutions, including particulars of accounts. These appertain only to a person who is resident of the State. No change is proposed in the present position regarding the accounts of non-residents of the State. Section 13 contains the relevant provisions and specifies particular penalties for noncompliance. Whereas at present Revenue must make application to the High Court, such access may in future be authorised by the Appeal Commissioners. The circumstances are that the taxpayer has filed a return of income or statement of profits or gains which his or her inspector feels is unsatisfactory; the officer has reasonable grounds to believe that the taxpayer has an undisclosed account or accounts with the financial institution or that the financial institution concerned has information which would establish that the taxpayer's return or statement is materially false; the officer, on application to the Appeal Commissioners, secures a determination from them that he is justified in seeking details of all accounts held by the taxpayer with the financial institutions and certain ancillary financial information.

Where the commissioners give such a determination, there is provision for appeal on a point of law to the High Court. The penalty for failure by a financial institution to comply with a request for information, made in accordance with the provisions of the section, is £15,000. That penalty can be increased by an amount of £2,000 per day in certain circumstances.

Section 14 places all matters relating to the Bill under the care and management of the Revenue Commissioners, subject to the chief special collector's managerial control of the arrangements for the amnesty. Section 15 contains the provision for the short title and construction.

I commend this Bill to the House.

Mr. Yates

I am most unhappy with the way the Bill is being rushed through this House, notwithstanding the improvements that have been made on what was originally proposed by the Government Chief Whip. We are being treated with contempt. It is outrageous to expect Opposition parties to have amendments with the Bill's Office this afternoon having received the Bill in completed form just yesterday morning. Unlike the Government, who has a plethora of tax experts in the Revenue Commissioners and in the Department of Finance who have been working on this Bill for several weeks, the Opposition is expected in a matter of hours to scrutinise the legislation without resources for expertise. This makes for bad law and is a fundamentally bad way to do business. It amounts to Government by decree rather than a system of proper parliamentary accountability. I have no doubt that some sections of the Bill are so ambiguous, and even contradictory, that they will require court adjudication. It is obvious there will be different interpretations by tax consultants and the Revenue Commission officials on basic aspects of the Bill.

This Bill is unique in the history of taxation in two respects: first, it is the first Bill ever to write off tax itself retrospectively; second, it has universally angered and upset everyone dealing with taxation. It is obvious that the Revenue Commissioners are deeply unhappy with section 2, which facilitates a tax write down to 15 per cent on earnings. The tax practitioners, on behalf of their clients, believe that the penalties provided for in the Bill are arbitrary and excessive. Its provisions undermine the compliance ethic. The Government is rewarding tax evaders. This makes a mockery of our entire tax system. The ordinary taxpayers, particularly those employees who have had to pay tax as they earn, are now being asked to approve of a situation where tax evaders can pay as they please and if they like. The compliant taxpayer, particularly Schedule D taxpayers who have been subject to interest charges, penalties and audit, must be shocked by the contrast in the treatment offered to operators and even their competitors in the black economy. This Bill, therefore, is inherently unfair and highly objectionable.

In 1988 the case for the general amnesty on interest and penalties was the introduction of self-assessment. It was to allow a clearing of the decks to a new administration system. No such circumstance exist at present. It is clear that the motivation for this Bill has nothing to do with taxation policy or enforcement methods. Its true objective is to provide next year's budgetary fix. This year's underlying Exchequer borrowing requirement is £900 million, excluding the proceeds from the sale of State assets. Indeed the 1993 underlying EBR could well exceed £1 billion. The once-off proceeds from the sale of shares in Greencore and Irish Life should have been applied to reducing the national debt, as they represent a capital receipt. Instead they are included in this year's budgetary arithmetic as a current receipt reducing the EBR to £760 million. The Government, with cynical disregard for compliant taxpayers, has now produced a rabbit out of the hat to appear by 14 January next to enable the 1994 borrowing figures to mask the underlying reality. It is a three card trick to give respectability to the public finances next year when the underlying trend will show a marked deterioration.

Tax revenues from the amnesty will help plug a serious budgetary gap for one year only. The underlying deterioration in the public finances seems set to continue. Since 1990 current Government spending as a proportion of GNP has risen from 36.8 per cent to 39.3 per cent this year. The outlook for 1994 is even worse. Public service pay fell to 13.7 per cent of GNP in 1989 but has risen constantly each year since. This year it will account for 15.2 per cent of GNP. The £4 billion public sector pay bill is 46 per cent higher than in 1987.

The Government has deferred additional public sector pay payments of £216 million to January 1994. There may be further increases under the local pay bargaining clause of the Programme for Economic and Social Progress and annualised increases in a new pay agreement. The abolition of the 1 per cent income levy creates a further revenue gap in 1994 of £130 million. Before we implement any of the lavish commitments in the Programme for a Partnership Government or embark on increased public sector pay in a new pay deal or on any improvements in public service we have a gap in excess of £500 million next year.

This Bill is a desperate political stroke to raise once-off cash. Logically this Government should consider a crime amnesty by releasing all current prisoners who have served 15 per cent of their sentences. This would give a fresh start to everyone and it would cost less to run the jails. This Bill is as farcical as that suggestion.

Fianna Fáil and Labour Deputies have sought to defend this amnesty on the basis that the proceeds will pay for expanded public services and tax reductions. Government backbenchers have been trotted out to say that this Bill will mean the abolition of the 1 per cent income levy, that it will mean that there will be more money for the handicapped, for education and so on. These multiple promises cannot all be met even if the most optimistic forecasts are realised. The yield from the amnesty will be once-off and must not be included in the Government's accounts as current revenue.

The Minister for Finance has repeatedly asserted that this amnesty is a last chance for tax evaders. It is a multiple chance. In fact three amnesties are being offered — an amnesty against interest and penalties, a social welfare amnesty and a tax write-off amnesty of 15 per cent. The Government, in response to public criticism of the initial idea, has kept digging a hole that has got deeper and deeper. The outcome of this is an amnesty culture which undermines the whole enforcement procedures of the Revenue Commissioners. Its hardly credible for Fianna Fáil, having had an amnesty up to 1988, and a similar one up to 1991, to say it will never happen again. This is the sixth amnesty the State has had since 1932.

The work of the Revenue Commissioners in recent years has been showing remarkable success. Under the Revenue audit programme 28,733 audits were completed in 1991 yielding £90.6 million. In 1992 27,916 audits were completed with an expected yield of £105 million. Added to this yield is the fact that the reputation of this audit programme underpins tax compliance generally in the area of self assessment. In answer to a Dáil question the Minister said that for 1990-93 the work of the self assessment audits had yielded an additional £41 million.

I understand up to 600 staff were to have been transferred to the audit division this year. I must assume that this programme is now in tatters as all audits will have to be suspended for the period of the amnesty. What was the most effective anti-evasion enforcement scheme has been totally undermined by this Bill.

The original purpose of the amnesty was to obtain repatriated foreign capital. It is clear that this will not yield any bonanza. This is because such foreign capital pays no tax on the interest income. If it is declared, future interest income will be taxed at 10 per cent or 27 per cent or, if sent abroad again, at the marginal tax rate.

So-called hot money held abroad is undetectable by the Revenue Commissioners. Absolute confidentiality and inaccessibility is a well established, highly marketed and a fundamental principle of foreign financial services. A myriad of offshore financial centres exist. For example, financial services account for 47 per cent of the GDP of a small State like Guernsey. Jersey, a small island with a population of 80,000, has £40.4 billion in sterling deposits and a further £7.3 billion under management. Financial services account for 42 per cent of their GDP. Does the Minister think they will volunteer any information about any of their accounts? The Isle of Man has had a huge growth; 4,000 people out of a total of 70,000 people work in the financial services sector. Gibraltar had more than £400 million in 1987 but deposits now exceed a staggering £1.5 billion.

There are now more than 700 companies which have located their offshore business in Malta. Cyprus has promoted itself as the complete centre for offshore confidentiality over the past 15 years. There are 600 offshore companies incorporated there. In addition, we have our own financial services centre. We do not have to confine ourselves to the British Commonwealth. We can look further. It is estimated that Swiss bank accounts handle 40 per cent or more of assets placed under management worldwide. Liechtenstein, which is in customs union with the Swiss, has a population of under 30,000 people but its secrecy is so developed that it is believed to have more companies incorporated there than people.

Mr. Rabbitte

The Deputy has done a great deal of research.

Mr. B. Ahern

I was waiting to hear the Deputy give statistics; they are so confidential that nobody has ever got them.

Mr. Yates

In the case of Luxembourg, and this is only a savoury of what is available——

Mr. Cox

If they all came back to Ireland for the 15 per cent they would be in serious trouble.

Mr. Yates

If a person has £1 million lodged in accounts in any of the those places, it will not be possible to trace such money. Why would people be tempted to pay 15 per cent on earnings in such circumstances? This is the position not only in the developed centres from the Cayman Islands to the Isle of Man——

Mr. B. Ahern

Would the Deputy like my files?

Mr. Cox

The logic is that we will have to cut the 15 per cent.

Mr. Yates

What is the position in Newry or Cardiff in Wales? We have a double taxation agreement with the UK. Article 25 of the Ireland/United Kingdom Double Taxation Convention, 1976, specifically precludes information flowing from the Inland Revenue Commissioners to the Revenue Commissioners about bona fide non-resident accounts. For example, if Deputy Rabbitte were to place £50,000 in an account in Newry, give his address and declare his non-resident account, that information relayed to the Inland Revenue would not be conveyed to the Revenue Commissioners. Why would Deputy Rabbitte be enticed to bring that money back to pay tax on it when he will lose the interest income which is free of taxation at present? Given that there are no exchange controls, there is no incentive to bring this money home.

These wealthy tax evaders are unlikely to concede 15 per cent of their capital in these circumstances. They will obviously be fearful irrespective of any secrecy deal — no matter how elaborate — that they could be included in a black list by the Revenue Commissioners. Section 5 of this Bill allows the Revenue Commissioners through the appeal commissioners to seek a reversal of the immunity from investigation offered by the certificate. These greedy and very wealthy tax evaders will not run the risk of liability to a future audit.

All the arguments relating to repatriated capital are void in the context of this debate. An ironic aspect of this amnesty is that many prominent Irish taxpayers have had to to change their domicile and live abroad because of the tax system. Irish income tax is computed on the basis of worldwide income whereas in the UK only foreign income remitted to the country of residence is taxed. It would be much more just and sensible of the Government to change this rather than to opt for this wholesale tax write-off.

Under section 13 there will be easier access by the Revenue Commissioners to all accounts in financial institutions. Heretofore accounts on which tax at 27 per cent was levied were confidential. I understand that financial institutions are concerned and fear, given the sensitivity of some of these depositors and their irrational attitudes to tax, that the net effect of this Bill will be capital outflows from these accounts to avoid investigation by the Revenue Commissioners. We have the ultimate irony that a measure designed to entice capital inwards may have the opposite effect.

I wish to focus on the most grave and disturbing aspect of this Bill, namely section 2 providing for the 15 per cent amnesty. The terms of this are fraught with unprecedented dangers for taxation policy and administration. It seems that the method of obtaining a certificate under the amnesty is by way of self-declaration. If a taxpayer declares that the amount is a full settlement of earnings and was not obtained from an illegal source, then the Revenue Commissioners cannot refuse a certificate. What will most likely happen is that taxpayers, fearful of a future audit, will pay a nominal sum simply to purchase a certificate as an insurance policy against a future audit. In other words, when the Revenue Commissioners audit a person's accounts in 1997, that person will produce one of these black certificates. That person may have declared £1,000 and paid £150. They will tell the Revenue Commissioners to mind their own business.

Fine Gael will be tabling amendments on Committee Stage to oppose section 2 of this Bill and to change this form of declaration so that documentary evidence and audited accounts will have to be produced by the claimant to prove the veracity of the claim that the declared amount represents his or her total earnings. The total earnings figure is in the eye of the beholder. While the claimant and the Revenue Commissioners may disagree, the Revenue Commissioners should be empowered to have some discretion in regard to granting a certificate. At present it has no discretion. If declarations are made and they do not relate to illegal sources, in those circumstances the Revenue Commissioners cannot question the validity of the certificates. The Revenue Commissioners must have some discretion to question the validity of such certificates if they know the information included is palpably not true.

The declaration that the declared amounts have not derived from an unlawful source or activity is a joke. Does the Minister really think that subversive groups who have procured their ill-gotten gains in the most appalling ways, for example, by drug trafficking, would be troubled by making a false declaration about the nature of their gains? They would not be in the least concerned.

The minimum requirement should be an additional certificate obtained from the Garda Commissioner stating that he is satisfied there is no attempt at laundering the proceeds of criminal activity. Fine Gael will be opposing section 2 as it is badly thought out and unworkable.

Fine Gael will also table amendments to provide for a number of additional measures. Interest rates have tumbled since earlier this year and it is not appropriate that the interest rate on arrears of tax should be frozen at 1.25 per cent per month or 15 per cent per annum. Such a rate is totally unrelated to the AA rate or the AAA rate. Interest rates should track prevailing commercial rates which are currently around 8 per cent. Those who availed of the 1988 amnesty should not have the benefits of availing of the provisions of this legislation.

Perhaps the most cynical aspect is that the amnesty is deliberately related to the 1994 accounts. The date of 14 January should be brought forward to 14 December so that the yield would be included in this year's Exchequer accounts as would be the normal procedure. Where the Revenue Commissioners intend to carry out an audit on a taxpayer they should be allowed to do so. The date of 25 May should be changed to 25 August this year to allow the Revenue Commissioners pre-empt the benefits of the amnesty to certain suspected tax evaders. Approximately 600 people in the tax office may have targeted the accounts of a few hundred people they had selected for audit this year. I am not referring to a random selection but a carefully selected group whom they were satisfied were living beyond their means. We are all familiar with the joke of the Revenue auditor who called to a man in Dublin and inquired how that man could afford to provide for four children in university, have holiday homes in Benidorm and Connemara, build a conservatory at his home and have a 1993 state of the art Jaguar on an income of £4,500 per annum. The taxpayer, no doubt compliant, said it was not easy. This example highights the problems faced by the Revenue Commissioners. Between now and 25 August Commissioners should be given the opportunity to write to a certain number of people and advise them that they will not be given the benefit of this amnesty.

Under sections 5 and 13 there is reference to "reasonable grounds" and "material extent". What are these terms to mean? They are entirely subjective. How are the appeal commissioners to interpret them? We will be seeking power for the Minister to establish clear and concise regulations for the operation of all appeal commissioners hearings under the provisions of this Bill. This will include allowing a representative of the chief special collector to attend such hearings. Prior to this legislation I have received complaints from accountants about the work of appeals commissioners. There is a feeling they are too compliant towards rubber stamping claims of the Revenue Commissioners. Former Revenue staff have been appointed as appeal commissioners. Appointment of such commissioners is entirely political. Does this mean a political involvement in "fixing" amnesty cases?

These sections are extremely unclear, messy and will undoubtedly be the source of litigation. They are a legal minefield and should not be rushed through this House. What someone would consider to be reasonable grounds for reversing a certificate and what others would consider to be reasonable grounds is completely open ended.

Fine Gael believes that all the proceeds and yield from these amnesties should go towards reducing the national debt and be treated as a capital receipt on a once-off basis.

Section 9 provides for jail sentences for tax evaders. It is not explained what scale of tax evasion will warrant a jail sentence of 12 months or eight years. We must have some clarity and some scale of offence. Sums should be specified to give guidance to the courts in this regard. Should someone who has evaded tax for a minor sum be subject to jail sentences or treated in the same way as the most wealthy tax evader who has defaulted on mega amounts of tax?

This amnesty legislation cannot be considered solely in the context of taxation. There are other criminal law implications. Amnesty claimants may have defrauded or defaulted on obligations to creditors. This is especially so prior to company receiverships or liquidations. Breaches of company law may have occurred. The proceeds of crimes such as drug trafficking or subversion may be part of the amnesty revenue yield. Is the Government offering an amnesty for any of those crimes? This cannot be justified.

The Government has not yet implemented the EC directive on money laundering, which they were supposed to do by January of this year. This imposes a far stricter regime on financial institutions in regard to the proceeds of crime and tax evasion. I understand it will be an offence for a financial institution to aid and abet the laundering of money and that the proceeds of tax evasion will be considered in the same way as the proceeds of other criminal activities. The amnesty provided for in this Bill breaches the spirit of that agreed EC policy, and the EC directive should have been implemented first.

I now wish to put some questions to the Minister to which I would like him to reply at the end of this debate. First, how far back must a declaration of undisclosed income go? This is unclear from the Bill. Is there any outer limit to which the people must reveal their income? If they have had a good thing going in the black economy must they declare when that commences? Second, why does the legislation not insist that all outstanding amounts of PAYE and VAT be paid in order to become eligible for the terms of the amnesty? That question must be answered. Third, if one has made an incorrect return for 1991-92 it seems from the Bill there is no obligation to correct that return. The obligation seems to be that the 1992-93 returns must be accurate. If it is clear there is a gap, is this tax to be completely written off, or what practice can the Revenue Commissioners adopt in those cases? Why has no provision been made to present a recurrence of the accumulation of arrears of taxes by including a requirement that direct debits be signed for VAT and PAYE? People who have a track record of being constantly behind in their payments should be obliged to enter into direct debits. What is the situation in relation to people who have obtained a tax refund through the business expansion scheme or in relation to directors' loans? Why has the Minister failed to include a clause that the tax refunded as a result of the return of these moneys to the legitimate economy cannot exceed the tax paid on the amnesty?

This Bill has been hastily conceived and its enactment is being excessively rushed. Its long term implications have not been adequately thought out. It is a crude, desperate and panic stricken measure to get the Government through the 1994 budget. In doing this it has created a precedent of writing off taxes due to the State which have not yet been unearthed through the audit process. The Government should withdraw this measure, even at this late stage, and must at all costs remove entirely section 2 of the Bill.

Mr. Cox

The Progressive Democrats will oppose this Bill. That will hardly come as a surprise to anyone in the House, given the opposition we mounted and the information we sought from a very reluctant Minister for Finance on this issue in the course of the Finance Bill. I would remind the House that none of these amnesties was part of the strategy for the budget this year. As I pointed out previously in this House, following a pause for reflection of some ten weeks before the Finance Bill was published no mention was made of the amnesty. Eventually, on the eve of Committee Stage of the Finance Bill, the Government agreed in principle to a form of amnesty in respect of "hot" money, probably to be levied at a tax rate of approximately 15 per cent. We then forced some debate on the matter on Report Stage of the Bill, during which some concessions were made by the Government. The amnesty did involve "hot" money abroad and, if I could use the phrase in terms of unaccounted for accounts in Ireland, "hot" money here in various accounts referred to by the Minister. The amnesty was then to be extended for a variety of reasons, not developed by the Minister, to include social welfare at that time.

If one examines the Bill before us today it provides for "hot" money amnesties, but beyond that it encompasses also capital gains, levies, a social welfare amnesty — we are not dealing with it in this legislation — and, for good measure, a 1988 style amnesty so that no cheat should feel left out of this charter. The Minister has produced for us "the mother of all amnesties." I was reminded of that phrase when President Clinton sought to pass his first virility test last weekend by blitzing part of Baghdad using £28 million worth of Cruise missiles. At the time I thought that our own "Saddam Ahern" was blitzing cheats with every available device to ensure these cheats get away with not meeting their due share of taxation.

We in the Progressive Democrats will oppose this measure because we believe it is unprincipled. That is a point I wish to return to, because I believe it is a fundamental point of our opposition. It is an unfair Bill in terms of its implications and is wholly and completely inequitable between compliant and non-compliant taxpayers. Following the implementation of a previous amnesty of a very different form, we were told it would be the last of such amnesties. Yet again it is rewarding cheating and evading and it proves that in Ireland today crime does pay. We are now bringing in legislation, proposed by this partnership Government of Fianna Fáil and Labour, which will enshrine in our law the notion that crime pays. For that reason we will oppose it as a profoundly unprincipled piece of legislation.

Compliant taxpayers represent the majority of taxpayers. I use the phrase "compliant taxpayers" because it included PAYE, but it includes much more also. It includes people in companies who struggled to pay their taxes and to survive in marginalised businesses but who, against all the odds, paid their bills. It says to every compliant taxpayer, you are a sucker if you pay your bill, if you play by the rules, if you believe in decency in terms of how any ordinary, proper, well-managed society ought to run its overall affairs. What is being offered is a con job and an attack on decency. What we are doing in this mother of all amnesties is elevating to an unprecedented status the role of the fixer, the stroke puller, the cute hoor, the dodger.

There is a famous phrase — I do not know whether it is in some of the American coats of arms —fortuna favet fortibus, fortune favours the brave. In this case the brave are the cute hoors who are slick enough to hang in there and cheat the system, either hoping against hope that someone will come along and grant them a reprieve from their cheating and evasion or believing in any event that decency does not count, that making a contribution to the running costs of society does not count. The victims who pay the price of the failure to pay taxes in terms of the absence of facilities, be they in health, education or employment creation schemes, do not count for a damn.

This Government from which we have heard so much since its formation — ironically, mostly from the Labour Party — about the need for ethics in Government, brings in this tawdry legislation as a means of conveying a clear signal regarding ethics. I refuse to believe there is the slightest concern about ethics in Government when the cheat, the cute hoor, is elevated to a reward status and decency is so gravely offended.

My Party made the point at length on Report Stage of the Finance Bill that this tax is profoundly unfair and inequitable, amounting to an arbitrary discrimination between the honest citizen and the cheat. If brought before the courts, it may fail on a test of constitutionality because of the arbitrary discrimination between compliant tax paying citizens and the non-compliant cheat or cute hoor who will be elevated to the status of someone who deserves to be rewarded. This is unprincipled legislation because it offends perhaps the most basic principle of any republic, that is, equal treatment of all people.

This Bill most assuredly is a million miles from that basic principle. It makes a mockery of the slogan on which the Labour Party succeeded in getting about 30 seats in last November's election — Put justice in economics and trust in politics. This Bill is some proof of justice in economics. People who pay their way get a kick in the teeth and the sheriff will be out to scalp them if they fall behind. However, the Government looks after those who do not pay their way. It is elevating that whole process in Irish politics to centre stage. People in that bracket are gold medalists and get a great reward. That is what we are legislating for.

On the Finance Bill Deputy Kemmy referred to people like me who express concern about the attack on the integrity of our tax system as altar boys. In a great declaration he said: "I am no Matt Talbot socialist, if there is money out there, let us be practical and get it". I am a politician who believes in pragmatism, but when pragmatism is bent to a point of no principle, one is entitled to ask basic questions. I am outraged by this legislation and the public has every right to be outraged and dismayed by it. For the vast majority of businesses, householders and ordinary individuals who pay their tax year in and year out, this is a kick in the teeth, the gravest insult that any administration could offer them.

This mother of all amnesties has an interesting line. I do not want to get lost in the promotion of the latest Steven Spielberg movie, "Jurassic Park", but there is at least one parallel to be drawn. The movie is based on a scientist who discovers a chain of DNA, a dinosaur DNA which grows up to be a real live monster. This amnesty proposal started as a twinkle in someone's eye — a little bit of DNA — an idea to bring home hot money. As Deputy Kemmy said in justification of this pragmatism, we could look after the mentally handicapped and we could get rid of the one per cent levy about which many complaints were made.

We tried to get information on this matter from a reluctant Minister on the Finance Bill, but he would not talk to anyone; he seemed to be in his office sulking. All of us got the impression that he did not believe in the idea of an amnesty. I still think he does not believe in it but he has to go along with the collective decision and he is now introducing a Bill and recommending it to the House. I do not think he believes in this mickey mouse arrangement. Under the Finance Bill we were told by the Minister that the hot money included money at home. At least twice in the Minister's contribution on the Finance Bill he said there are 15 million bank accounts that must be dealt with. At this stage it looked as if the DNA was growing, there were two segments of hot money, that abroad and that at home, but if the money at home was already employed in the economic cycle it was not clear that it would be a great bonus.

It was then decided to introduce a social welfare amnesty, the major beneficiaries of which will not be the fellow on the dole who is doing a little work on the side and who probably will not reveal this information anyway because he knows that in our society cute hoors get away with everything. The people who will get the big break from the social welfare amnesty are those who did not pay their PRSI and so on.

Finally today the DNA is revealed for the dinosaur monstrosity it is. Section 2 of the Bill deals with hot money abroad, hot money at home, income tax, capital gains tax, levies and so on. To add further insult to injury, the people who avail of the amnesty will have to pay only 15 per cent tax on this money. The 15 per cent will sort it all out. Under this Bill the Revenue Commissioners will have no right to inquire into how business was conducted in recent years. In one bound our hero, in Ireland's case "the cute hoor", is free as a bird. Even though many laws have been broken, who cares?

There is a profoundly disturbing second dimension to this Bill. The Minister may have mentioned this in coded language when he spoke on the Finance Bill. In his budget speech in 1988 the then Deputy Ray MacSharry said in relation to an incentive to bring tax affairs up to date:

To encourage taxpayers to bring their tax affairs up to date now, it has been decided to offer them, on a once-off basis, an opportunity to settle outstanding tax liabilities without payment of certain interest or penalties.

The scheme was published in due course. During an interview yesterday I remarked that this "once-off" proposal reminded me of the chap who goes along to the Munster Final selling tubs of ice cream who will shout "last of the ices" to encourage people to buy immediately and ten minutes later we will see the same man with another box of ice cream still shouting "last of the ices". This Bill promises El Dorado around the corner as an incentive for people to settle their accounts now.

On behalf of the Labour Party Deputy Barry Desmond in 1988 had a few things to say. He was apoplectic with rage. At the time Deputy Desmond was lit up like a beacon, like an eagle soaring over the Minister, complaining about the proposed tax amnesty. Deputy Desmond said, at columns 1495 to 1497 of the Official Report of 20 April 1988:

... it is fundamentally wrong because in three years time people will be baying for another tax amnesty and perhaps a future Minister for Finance will reintroduce it. Once you go down that road, it is hard to stop in terms of administering an effective system ...

That was some prescience from an apoplectic Labour Party in 1988. It was prophetic. We are now proposing "the mother of all amnesties" again. If one does not fit into the staggering unprecedented undermining of the tax code in section 2, section 3 will come in. That is a profound mistake in terms of administering the tax code.

Another section of the Bill really captures its spirit. The cheat, having paid the 15 per cent and being given the certificate, has to be re-assured by the Minister that he can get away with cheating in perpetuity and that nobody will come after him and winkle out the nasty details of the extent of the cheating. In section 7 we have set up the special collector, who will be bound by very stringent confidentiality requirements. The law demands the confidentiality of the special unit and guarantees confidentiality to the cheats, and if any one of the special collectors squeaks out of turn he will be fined. If the people who administer the system tell anyone in Revenue, let alone anyone in the public, anything about the previous tax affairs of cheats, he will be fined.

The Minister did not mention the Schedule to the Bill, but the public would like to know what the new collector must do with regard to confidentiality. The special collector must appear before a commissioner for oaths and declare, as the Bill provides:

I, A.B., do solemnly declare that I have read and understand section 7 of the Waiver of Certain Tax, Interest and Penalties Act, 1993, and that I will not disclose, or cause to be disclosed, to a person who is not a special collector (within the meaning of that section) any information which I acquire, or have access to, in the course of discharging special collection functions (within the meaning of the said section) save where the disclosure of such information is deemed, by virtue of the proviso to subsection (4) of the said section 7, not to be a contravention of this declaration.

The exemptions are minimalist. It seems that we are to invent some new specialist unit in Revenue. I will call it the Gulag Archipelago. I do not know how one can come out of the Gulag unless one can become a sort of schizophrenic where one part of the personality knows many things about all the cheats in the country but which cannot be revealed to one's other self if one leaves the Gulag to become an ordinary Revenue officer dealing with tax files. This solemn declaration converts the Revenue collector into a Trappist monk. What we have in this amnesty, brought to us by the Minister in this unprincipled legislation, is a confidentiality system which requires people hired by the State to administer tax and to follow up on cheats to take a Trappist vow of silence which they must never consider breaking save in the narrow circumstances provided for by the Minister in this text. This whole Bill is an outrage. A double bonus is being given to the "cute hoor" syndrome in Irish society. First, a person gets away with blue murder if he or she does not pay tax. Then a certificate is received from Saddam to the effect that he or she has been cleared and will not be subjected to any future investigation. The people who know the details are sworn to a Trappist-like secrecy. What will happen to those officials, will they be sent to the Gulag, to the dark side of the moon or will they be dispatched from Revenue? What will happen them when this mother of all amnesties has run its course? If they are ordinary Revenue officials and they recognise a name or know something about a taxpayer will they have to partition themselves from the other staff? It is a most extraordinary process and shows the length to which this Government has gone to facilitate, in an unprincipled way the most unprecedented attack ever on the integrity of our tax system.

I shall be tabling a number of amendments to the Bill on Committee Stage. I thank the Minister for giving me an early copy of the Bill which I studied on the train journey to Cork on Monday. We are discussing Second Stage today and the deadline for receipt of amendments is this evening. As a result I will miss much of today's debate. I would prefer to be here to listen to other Members' contributions. Committee Stage has been ordered for tomorrow. This is a crazy way to do business.

I have difficulty with some of the provisions for example, sections 9 and 11 which specify the penalties. Section 516 of the Finance Act, 1967 specifies potential mandatory sentences. As we contemplate imposing more mandatory prison sentences, will the Minister explain why the system we have does not work? Why should I believe that including 12 months or eight years' imprisonment will mean the quality of enforcement will be any different from what has gone before? We are entitled to an explanation.

Section 94 of the Finance Act, 1983, gives some discretion as to how revenue offences are dealt with. There is no discretion afforded in the Bill. Is it a good idea not to give the courts some discretion? If they have no discretion they might be more lenient.

Deputy Yates raised a point about section 13 which deals with access to bank accounts. Would it not be a curious paradox if something that began as what was described as the DNA, as bringing hot money from abroad into Ireland, ended up pushing money from Ireland? What would be the impact of the right to go back ten years and look at bank accounts?

The Central Bank wrote a letter on 23 July 1985 to the Commission on Taxation. The letter, which mentioned the Fifth Report of the Commission on Taxation — pages 179 and 180 — stated:

... it would be extremely difficult to maintain confidence in the normal relationship between banks and their customers if there were to be unrestricted access to customers' accounts by the Revenue Commissioners. The Bank would be concerned that an erosion of that confidence would result in an outflow of funds abroad from both resident and non-resident accounts.

Has the Minister consulted the Central Bank? Has the Central Bank changed its mind? The Central Bank, who relate to all the commercial banks in submissions to the Commission on Taxation stated clearly the very fear that has been expressed today.

With regard to offences I would ask the Minister, and his officials, to consider the Fifth Report of the Commission on Taxation. There has got to be some de minimis process between a minor offence, putting one into prison, giving one a criminal record, and a massive mugging of the system. Some excellent elements of the Keith Commission of 1983 in the United Kingdom which were recommended by the Commission on Taxation were not even examined. This Bill is flawed in that regard.

My party, strenuously oppose this Bill. It is bad, inequitable, unprincipled and unethical. In our Republic, it elevates those who cheat and dodge to a status of being rewarded. It is a kick in the teeth to the honest, decent, regular taxpayer.

The Progressive Democrats consider it an unworthy Bill which damages the credibility of those who promote it and of the institutions of State. It is unworthy of any Government that has half a notion of what constitutes ethics in Government to stand over it.

Mr. O'Malley

On a point of order, in this debate very important points have been made by Deputies Yates and Cox. I am sure others will be made by Deputies Rabbitte and we should have some Members of the Government parties here to hear them.

Notice taken that 20 Members were not present; House counted and 20 Members being present.

Mr. Rabbitte

I am always grateful to the Labour Party for giving me the opportunity to speak. I would miss them if they were not cheering me on.

Dr. Upton

Is the Deputy that desperate for an audience?

Mr. Rabbitte

I move amendment No. 1:

To delete all words after "That" and substitute the following:

"Dáil Éireann, believing—

(a) that the proposed tax amnesty is an affront to tax compliant citizens,

(b) that it rewards those who have broken tax laws and exchange control regulations and will encourage further tax cheating,

(c) that it is particularly unacceptable that those who benefited from the 1988 amnesty and who have since again reneged on their tax obligations to the community will again be allowed to evade penalties and interest,

(d) that the guarantees of anonymity offered to tax offenders will facilitate further evasion and will inhibit the investigation of the source of moneys which may, inter alia, have originated from serious criminal activities,

declines to give a Second Reading to the Bill."

Within the past few years we have had a general tax amnesty, a tax amnesty for unpaid capital acquisitions tax, unpaid PRSI and unpaid stamp duty. However, the Waiver of Certain Tax, Interest and Penalties Bill, 1993, constitutes the mother of all amnesties. Originally this was Albert's amnesty for big time tax cheats who had lied to the Revenue Commissioners and salted away their gains, illgotten or otherwise, in tax havens abroad, in bogus accounts here or simply in financial institutions outside the State.

The message is: "Come home; your country needs you; all is forgiven; give us 15 per cent off the top and mum's the word", but Bertie did not like Albert's amnesty because it threatened to undermine the very integrity of the tax system by blatantly rewarding tax cheats and thumbing its nose at tax complaint citizens. We now have Bertie's amnesty. The lucky taxpayer who breaks his or her back week in, week out, to pay their lawful taxes now gets two amnesties for the price of one.

Realising that he manages a tax system that stumbles from one amnesty to another the Minister for Finance has decided, since he cannot stop Albert's amnesty, to levy some serious money. It is five years since those who availed of the 1988 amnesty contributed £500 million or more. They should be good for another £300 million at least by now. After all, most of them know that in our political culture all they have to do is keep the Revenue Commissioners at bay for a few years and the chances are there will be another amnesty around the corner.

The Minister for Finance is aware that the Department of Finance agrees with the Opposition that the original amnesty, Albert's amnesty, would not have raised a fraction of the money claimed by its advocates. The only way therefore to ride out the wrath of law abiding taxpayers is to show that there will be a pot of gold at the end of the exercise. This can only be done by way of a general amnesty á la 1988.

The prize for the Minister for Finance in fixing the deadline of 14 January is a windfall gain which will ease the scale of his problems in constructing the 1994 budget, but the price for the Minister for Finance is that he risks undermining the tax system that he supervises, because above all else this mother of all amnesties threatens to undermine the improved detection and collection system ushered in by the same Minister. It saps the morale of the Revenue Commissioners staff and calls a halt to some of their most valuable work.

I ask the Minister if he recognises the following quotation:

To restore confidence in the democratic process by encouraging greater openness and participation at all levels, by improving public accountability, transparency and trust and by ensuring the highest standards in public life.

Mr. Cox

That sounds like a meaty quotation.

Mr. Rabbitte

That comes from page one of the mission statement, the Programme for a Partnership Government. It is salutary to compare the high flown rhetoric of just a few months ago with the seedy reality of trampling on tax compliant citizens in favour of crooks, liars, cheats and dodgers. These fine sentiments are unrecognisable today, sullied and killed off by the nod and wink political culture that creates one law for the rick and powerful and another for ordinary citizens.

Most tax compliant citizens — the PAYE sector, for example — have their taxes deducted automatically. Many tax compliant citizens outside the PAYE sector are vigilantly policed — sometimes, they argue, to the point of harassment — by the Revenue Commissioners. However, those who by definition do not comply with the tax laws will now be about to make a self-declaration and effectively have its contents accepted automatically and will be statutorily protected in the future from being investigated by the Revenue Commissioners. The word of cheats, dodgers and liars will be automatically accepted while "officers or employees of the Revenue Commissioners may be fined heavily" and, ultimately, presumably, imprisoned if they refuse to discharge such fines or for a breach of confidentiality.

This Bill is about not paying one's taxes and it opens up the Orwellian vista of tax collectors being locked up for a breach of confidentiality while those who have breached the law will have the law set aside and new laws created to protect them from being investigated. The stringent requirements of confidentiality that this Bill imposes on special collectors obliging them "to give a permanently binding undertaking" that in no circumstances will they disclose information obtained in the course of administering the amnesty, are bizarre. It appears that they will not able to communicate such information to the Minister save in aggregate form only. It is unclear whether we can be assured that beneficiaries, made respectable under the amnesty, will be recorded as being within the tax net for the future. The guarantees of confidentiality are so absolute as to make a laughing stock of the people who struggle to lawfully pay their taxes. My party will be tabling an amendment to require, at a minimum, that beneficiaries under this legislation will have their identities published in Iris Oifigiúil.

It is clear that Opposition arguments concerning the original hot money amnesty, Albert's amnesty, now called the main amnesty, have struck home. It is estimated that the revamped amnesty will produce a windfall of between £300 million and £500 million for the Exchequer. The question arises as to what this says about the efficacy of our tax system. It shines a harsh light on the extent of evasion in our society. It also exposes the limited success of the 1988 amnesty and the culture of expectation that there is another amnesty around the corner. It is clear that the last amnesty did little to cause many wealthy citizens to put their affairs in order. However, the 1988 amnesty, which wiped out penalties only, was far more severe than the main amnesty under this Bill. Therefore, why should there be any expectation that those who will get away virtually scot-free under this amnesty should now be motivated to join the ranks of tax compliant citizens?

In yesterday's edition of the Irish Independent the business editor stated:

Throughout the country there will be people with undeclared tax liabilities assessing their positions (or employing their accountants to do so). Many of them will not even look on this amnesty as an opportunity to settle their legal obligations at low cost, but will wonder if they might be better off avoiding contact with the Revenue Commissioners totally by keeping their money overseas, believing that it is beyond detection anyway.

Some will take advantage of the amnesty, not through any moral obligation but because of the fear of the new sanctions being introduced.

Last Monday, the day this Bill was finally published, the musical version of Les Misérables opened at the Point Theatre. This is Victor Hugo's story of Victor Jean Valjean who was sentenced to 19 years' imprisonment for stealing a loaf of bread to feed his sister's family. On Tuesday last a man was charged in Dublin District Court with stealing food worth £25 to feed his family. While our political system is not much more successful in eliminating poverty and hunger than Louis Philippe, fortunately for this man our courts at least in this case showed some of the enlightenment which 200 years of progress ought to have brought us. The motto of the age of Louis Philippe, the umbrella king, was enrichez vous, get rich. Could there be a more apt metaphor for this legislation than the reproduction in 1993 of the set of Les Misérables, not in the Point Theatre but on the streets and in the homes of Ireland? Despite the achievements of the welfare state the message to those who do not have to steal to feed their families is still enrichez vous with a guarantee of only minimal and differential efforts by the State to draw a contribution.

As has already been said, my party is opposed to this amnesty in principle because of the damage it threatens to do to the tax system on which any kind of civilised society depends. The one question which occurred to me during the Minister's speech, as he made affirmation after affirmation, was: how do we know? The Minister has made statements to the effect that if these self-declarations are found to be false very serious penalties will ensue. How will we know if they are false? The greatest single defect in the Bill must surely be that people who are by definition, liars and cheats are to have their word automatically accepted.

Leaving aside for a minute the principal argument about whether it is a good idea every five years or so to have a tax amnesty for tax evaders while the rest of the population who cannot afford the expertise of the tax avoidance industry have to pay their taxes, I want to look at the amnesty in the context of the argument that there is a lot of money out there and we could be doing something useful with it here.

It is absolutely remarkable that we have reached this stage of the Bill and we still have not been visited by a Labour Party Deputy, apart from when the quorum was called. I invite my Labour Party colleagues to come into the House and tell us where they stand on the principal argument and the extraordinary provision in the Bill which will enable those fat cats, when they arrive back from wherever they have been, to make a self-declaration to the effect, "Here is the £100,000 which I am re-importing into the country. I say to you that this money does not have its origins in any criminal activity. I further say to you that it is a full and true statement and I happen to have a cheque for £15,000 which I will now give to you. Can I have my certificate, please?" The special collector will have no special powers to look behind that statement. He must accept the statement of someone who, by definition, is a liar — he would not be in this position if he was not a liar.

The Bill is about the non-payment of taxes. The people who have defrauded the Exchequer and told lies to the Exchequer can come back at this late stage and make a statement while every other tax compliant citizen can be subjected, as they often are, to the most niggling, pernickety questioning by the Revenue Commissioners. This Bill will enable a person to come back from his Christmas holidays on the Canary Islands and make a statement which must be accepted. I find this proposal very difficult to accept, especially as the early argument was that we should look at the success of the 1988 amnesty. The 1988 amnesty did not have this provision in this form. If this amnesty is modelled on the 1988 amnesty, why go to extreme lengths to thumb our nose at ordinary law abiding citizens who do their best to comply with the laws of the land?

I do not think it is fully understood that the section dealing with confidentiality is as all-embracing and as much a source of comfort as I have just stated. Section 2 proposes that once the prodigal son returns and makes a statement it will be automatically accepted. There is no point in dressing this up. The Minister said that a statement will not be accepted if it is proven to be false. How can it be proven, by definition, that a statement is false? It is the most extraordinary mechanism whereby in return for paying over, say, £15,000 from the £100,000 brought back the person availing of the amnesty will get a "stop cert", the effect of which is to stop the Revenue Commissioners from ever investigating or probing the source of the money or establishing the validity of the statements set out in the declaration. This is an appalling affront to the tax compliant citizen. It is a disgrace that such legislation should have been brought before the House. Like Deputy Yates, I will put down amendments on Committee Stage to require that supporting documentary evidence is furnished in that declaration, including audited accounts in such form as prescribed by the Revenue Commissioners.

The protection being given to those tax dodgers is absolute within the terms of the Bill. We have the farcical situation whereby officers of the Revenue Commissioners, doing what they have always been supposed to do, may well end up in jail for a breach of confidentiality. A breach of confidentiality not just to someone in a pub or on the public street but to their colleagues in the Revenue Commissioners or to the Minister is almost unbelievable.

The Minister said there will be penalties for breaches of confidentiality, whether to the public at large or to the general Revenue staff.

Mr. Yates

What if they talk to themselves when they are subsequently transferred from that section?

Mr. Rabbitte

It appears that if they talk to themselves in their sleep at night and their spouse, or whoever they happen to be in bed with at the time hears them, they will be liable to these penalties. That will be extraordinary, not to mention what other consequences exposure of their nightly habits might bring on.

The Minister said the incentive scheme was not available to individuals with undisclosed — or undischarged — liabilities deriving from an illegal source or activity. How do we know this? I cannot establish from the Bill how we could possibly know whether the gains concerned derive from any illegal source or activity. We have the facility of self declaration and unless the person concerned happen to be a particularly prominent or well known head of some criminal gang in the city I do not know how it can be established whether the moneys are legal or not.

The establishment of a special collection unit within the Revenue Commissioners, and the creation of the role of special collectors, will not help to probe this in any meaningful way. The opening paragraph of the Minister's speech states: "bearing in mind that such evasion is difficult to detect at this remove." If we all agree that it is difficult to detect at this remove, and I agree, I do not understand how the special collector is suddenly going to be able to detect it and establish the validity of the declaration. That is a particularly disgraceful provision.

I am curious about another aspect of the Minister's speech. In line with the parliamentary questions answered in the House the Minister again said that he cannot say how many cases precisely benefited under the 1988 amnesty except in the form set out in his speech. However, he conceded that most were in the tax net already and were in arrears. He said that only 366 taxpayers — I thought the figure was 284 — were first time taxpayers and 13 companies which were not previously recorded by Revenue. That is a very small number, but, obviously, they are extremely wealthy individuals and companies. He went on to say that this amnesty has been framed with a particular focus on the liabilities from the pre-1991 era which are not on the record. If we failed in 1988 I do not know how we are going to attract them on this occasion. Deputy Yates dealt with this at some length. I presume the Minister is referring to "Albert's amnesty."

Acting Chairman (Mr. Kirk)

The Deputy has one minute remaining.

Mr. Rabbitte

Obviously I did not get injury time for the arrival of the cavalry. I presume the Minister is referring to what is now known as the main amnesty and to the fact that this fantastic inducement of tax at 15 per cent will cause these people to regularise their affairs. It is a fantastic inducement if you have money outside the State or in a bogus account in the country for the past 15 years. That person will now get away with paying tax at the rate of 1 per cent as compared to the rest of us who pay at present 48 per cent and, indeed, if you go back over the 15 years a great deal more when it was in excess of 60 per cent at some stages.

It is extraordinary that a Government who promised such high standards in public life and promised to usher in an ethics in Government Bill immediately prior to this legislation has forgotten about that Bill which is now on the back-boiler. That says a great deal about ethics in public life. The Minister is being slightly disingenuous in the way he has explained its provisions but I believe he has decided to make the best of the political circumstances in which he finds himself. It will be windfall in the framing of the 1994 budget and I suspect it will not do any harm to the accounts of Fianna Fáil either.

Mr. O'Leary

I compliment the Minister for Finance on his wisdom, foresight and courage in bringing this important Bill before the House. I am convinced that the Opposition do not understand the real thinking behind it and I am surprised by their attitude. Do they not realise that money is urgently required for a great many services and for job creation purposes? All county councils are requesting money from the Department of the Environment every day for their county roads. The county roads in County Kerry, for example, are in a desperate state. That is one of the reasons this Bill should be welcomed. The money that will accrue after the Bill is passed will help in the provision of badly needed infrastructure such as water and sewerage schemes, the improvement of tourist roads and other developments. I would like to see the money being used to improve our health services and additional moneys provided for the health boards. Some of this money should find its way to improving the education service for our young people. Are the Opposition saying that money should not be obtained to provide these services?

We can use the money to assist our farmers. Job creation is our top priority. The capital repatriated can be invested in projects such as agricultural and horticultural enterprises as well as tourism enterprises and community based projects. It could also be used as venture capital for manufacturing enterprises. Finance will become available for job creation generally and it will enable the Minister to pay the justifiable pay increases to public servants whether in the Civil Service, the Garda Síochána, the health boards or the county councils.

This Bill, colloquially known as the tax amnesty Bill, has one aim, to bring much needed cash into the Irish economy. The money should be used to redress the imbalance of the current tax system and generate more jobs. The Bill was both accepted and opposed by the Fine Gael spokesperson, Deputy Yates. Fianna Fáil are confused, but unlike the Opposition parties, we are only confused by the Fine Gael stance on this Bill. Fine Gael has engaged in political posturing in the past few months but, unfortunately, that is all we have seen. We have yet to see them perform in a constructive political manner. We will wait in the hope that after the summer recess things will improve and it will behave more like an Opposition political party. Fianna Fáil in Government introduced an amnesty in 1988 for tax evaders and this proved to be extremely successful.

I wish to share my time with Deputy Eoin Ryan.

Acting Chairman

Is that agreed? Agreed.

Mr. O'Leary

The amnesty of 1988 should not be confused with the 1993 amnesty. Its purpose was to introduce a new self-assessment system. This amnesty yielded £500 million to the Exchequer. I have no doubt that the 1993 amnesty will prove to be equally successful, if not more so. As in the case of the 1988 amnesty, nobody is sure as yet exactly how much money this current amnesty will yield. Conservative estimates are quoted as saying that it could yield as much as the 1988 amnesty, but these same people were quoted as saying the 1988 amnesty would only yield £30 million. As no one is sure until the amnesty is introduced and implemented, I will continue to be optimistic about the figure and say that it will exceed the 1988 figure which was in excess of £500 million.

The objectives of the 1993 amnesty are to provide a final opportunity to those who have failed to get their tax affairs in order in advance of more severe and stringent tax laws and to further enhance the tax compliance programmes. The most important aspect of all is to secure the highest proportion of previously undisclosed sums in the period up to and including 5 April 1991.

This latter point has been discussed in great detail at our parliamentary party meetings and it is on this point that I would like to concentrate. I welcome the Minister's announcement that this Bill will introduce a special unit within the Revenue Commissioners, which will not communicate with the rest of the Revenue, for the purpose of collecting this "hot money". This unit will allay the fears of those involved in the return of the "hot money" that they might in future be subject to ongoing tax investigations. The staff of this special unit will be obliged to respect absolutely the anonymity of applicants. There will be penalties for breach of such confidentiality to the general Revenue Commissioners. This will only apply to those availing of the 15 per cent "hot money" amnesty. People dealing with the general amnesty must, however, deal with the main Revenue offices and will not have the protection of remaining anonymous.

Mr. Cox

The bigger the cheat, the bigger the let off.

Mr. O'Leary

That is not necessarily correct. For the purpose of the liquidation of assets applicants for the scheme must apply before 30 November this year but the deadline for payments will extend until January 1994. For individuals who were under investigation by the Revenue Commissioners on 25 May 1993 — this being the date the amnesty was first announced — the amnesty is not available.

I congratulate the Minister on his proposals to imprison people who after this amnesty still try to evade their taxes. It is time everyone started to pay their fair share of taxes. For far too long the PAYE sector has been carrying the burden of social welfare payments on its own.

Mr. Cox

Because of tax cheats.

Mr. O'Leary

In 1992 the PAYE worker paid 88 per cent of all income tax collected by the State. This unfair burden must be shared on a more equitable basis.

There has been much criticism of the Government's intention to introduce this amnesty, but not one of the critics has suggested that there is not money out there which will come back into the economy through this amnesty. The Exchequer needs any money that can be found without further taxing the PAYE worker. This money can be used to reduce the national debt.

It has been suggested that there is in excess of £2 billion in overseas accounts. When this money is returned it will be taxed at a rate of 15 per cent. There has been no suggestion as to exactly how much money is held in banking institutions within Ireland. This money will also be liable to the 15 per cent tax rate.

This Bill also introduces tough new measures for tax evaders. Prison terms of up to eight years will apply to financial institutions who aid and abet tax evaders. Furthermore, banks or building societies which fail to comply with demands for information from the Revenue Commissioners face fines of £15,000 for the first day of refusal and a further £2,000 for each subsequent day.

I listened with interest to the Minister's speech this morning on this Bill, and I was delighted to hear his tough stance with regard to this amnesty. Section 4 provides for the withdrawal of full benefits in certain circumstances. These cases include an individual who does not file a correct return of income for the 1992-93 tax year in time; in the case of a company if a correct return for any period ending in the year to 31 December 1993 is not delivered on time; declarations given by a taxpayer to the chief special collector which prove to be false; and if the amount paid by the taxpayer to the special collector was less than the full amount due by that taxpayer. These cases must surely alleviate the fears that have been expressed by those people, who have been knocking the amnesty as a write-off for tax dodgers to the detriment of the legitimate taxpayer.

I have also listened with interest to Deputy Yates speaking on this Bill this morning. I found it quite amusing listening to him speak against this amnesty especially as only last month Deputy Yates wrote an article for the Irish Press suggesting that such an amnesty be introduced. He then went on to introduce an amendment to the Finance Bill also suggesting that the Government introduce such an amnesty.

Mr. Cox

That was to facilitate discussion.

Mr. O'Leary

Only after writing this article and putting forward this amendment did the Fine Gael finance spokesman, Deputy Yates, think it prudent——

Mr. Yates

Who typed up this script for the Deputy?

Mr. O'Leary

——to discuss his views with his Front Bench and indeed, with his Leader. Fine Gael has proved during this whole saga that it is in total disarray. It should make some effort to get its affairs in order before coming into the House with amendments. It would save both the time of the House and the embarrassment of Fine Gael if it could discuss its plans for future legislation at its parliamentary party meetings. This would also seem to apply to the Private Members' Bill going through the House this evening.

Mr. Cox

Is the Deputy splitting hairs?

Acting Chairman

Deputy O'Leary to continue without interruption.

Mr. O'Leary

This is serious business. Fianna Fáil has shown in Government that we lead by example. We have introduced constructive legislation and arranged that it be discussed at our parliamentary party meetings and then in the Chamber.

I conclude by commenting on Deputy Cox's contribution on the amnesty this morning in which he referred to President Clinton's bombing of Saddam Hussein's intelligence centre in Baghdad and compared this to the Minister's introduction of the amnesty. His comparisons are misplaced. I would not like to comment further on this bombing as I do not think it appropriate to discuss the loss of life in such a cheap political gibe.

Mr. Cox

I think the Deputy missed the point.

Mr. O'Leary

The Progressive Democrats have always held the high moral ground but this is hardly an example of holding the high moral ground. This Bill is one of the most——

Mr. Cox

Outrageous.

Mr. O'Leary

——interesting and best thought-out Bills to come before this House since 1988.

Mr. E. Ryan

I thank Deputy O'Leary for sharing his time with me. I welcome this Bill. The accusation levelled at the Minister, his Department and the Revenue Commissioners that they are not fully behind this Bill has been proved false. There is no doubt that this is a very comprehensive Bill and is more far reaching than originally expected. Expert opinion raised some doubts about the workings of what was originally discussed a few weeks ago. There is no doubt that a serious effort has been made to make this Bill work and I welcome that. Certain Members of the Opposition were trying to sabotage the whole Bill. One Member of the Progressive Democrats talked about going to the Supreme Court and everywhere else to stop it. I am delighted that the Bill is comprehensive and I have no doubt it will increase the Exchequer funding and ease the situation for the Minister in his next budget.

In his contribution the Minister said that a lesser charge was an essential feature of any scheme aimed at bringing people within the tax net. That is important because, regardless of what we believe, we would not have attracted that money back into our system. Many people were of the view that it was only a matter of time before the Revenue Commissioners caught up with those who were defaulting on paying their taxes. We are all aware that is untrue. In very few cases would the Revenue Commissioners have been able to find "hot money" abroad. They might do so in a small number of cases but not in the majority. If the Revenue Commissioners had access to offshore accounts the lucrative system on those islands would collapse because the main attraction for tax defaulters is the secrecy surrounding such accounts. There was never any question of the Revenue being able to access those accounts.

Section 2 (3) (a) (iii) refers to "a full and true statement of the respective amounts". We are all aware of the complexity of tax matters and that there are numerous accounts and tax advisers dealing with such matters. If a person discloses what he or she believes to be full liability and makes a genuine effort to repay it, who will deem that to be a full disclosure? The Minister stated that Revenue would be prohibited from pursuing such an investigation further unless it can show to the satisfaction of the appeal commissioners that any declaration made by an individual to the chief special collector under sections 2 or 3 was not a full and true declaration of the amounts of his or her undisclosed income or chargeable gains, or of the amount of value added tax contained in the arrears of tax paid, as appropriate. With whom does the buck stop? Will the chief special collectors have the final decision? Will it be possible for a Revenue official to claim in, say, one year's time that a person did not declare his full accounts although the person involved may genuinely believe he or she did so? There is a maze of personal and company advantages one can seek. An individual may genuinely claim some of those advantages but, subsequently, it may be proven that it was a mistake.

What powers will the chief special collectors hold? Will they merely issue receipts or discuss tax affairs with people and agree on a tax liability? Will it be impossible for the Revenue to go back to a person some time later and claim that he or she did not make a full disclosure? That is an important issue. The tax system is a complicated one and, therefore, a clear agreement should be in place in that regard.

I welcome the Bill. It will ease the difficulties faced by the Minister and the Government in the next budget. Pressures have eased already because the economy is picking up and, hopefully, the tax amnesty will bring in a considerable amount of money to assist the Government in doing many of the things which the Opposition want us to do, such as reduce taxes, increase various services——

Mr. Cox

Do not do that, it would only be a once-off measure.

Mr. E. Ryan

Hopefully, it will do that if we receive enough money. Surely Deputy Cox is not stating that we were unable to reduce tax following the last tax amnesty.

Mr. Cox

This will be only a once-off measure which cannot be operated every year.

Mr. E. Ryan

Surely Deputy Cox is not saying that we did not improve services and reduce taxes after the last tax amnesty. Everybody knows we did that.

Mr. Cox

The Minister confirmed that very few new cases came into the system.

Mr. E. Ryan

It is difficult to take seriously some Members of the Opposition who have taken a high moral ground on this issue. Of course, the Progressive Democrats take a high moral ground on every issue.

Mr. Cox

This is disgraceful legislation and anyone, even a person on low moral ground, could see that.

Mr. E. Ryan

It is up to the Deputy to decide that. I do not believe it is disgraceful legislation, but I do not have a high moral ground or go around beating my breast on issues such as this.

Mr. Cox

Nor do I but, as a legislator, I have a right to express my views.

Mr. E. Ryan

Will contributions to members of one's family have to be declared? That would put a hole in the pockets of some members of the Progressive Democrat Party.

Mr. Cox

I wonder would it.

Mr. E. Ryan

It is difficult also to take members of the Fine Gael Party seriously in regard to this matter. Deputy Yates was correct when he stated, although he has taken a great deal of grief on it——

Mr. Yates

This measure will send many people abroad.

Mr. E. Ryan

The Deputy was correct in what he stated and his party is incorrect. The Deputy's original idea about a tax amnesty being a good measure is correct. It will bring in extra money and, hopefully, we can reduce taxes and bring more people into the tax net, as Deputy Yates correctly stated.

Mr. Yates

Access to bank accounts will send many people abroad.

Mr. E. Ryan

The majority of those who pay their taxes are not as opposed to this measure as the Opposition would like to believe.

Mr. Finucane

I do not share the enthusiasm of the previous speakers in regard to this tax amnesty and I am reflecting a majority viewpoint. We must not forget that 88 per cent of our population are made up of PAYE taxpayers. This measure will not send a positive message to the PAYE sector and other compliant taxpayers. When they discover that those who have defaulted on tax in the past are being provided with an amnesty, naturally, they will query their rights.

The Finance Act, 1988, makes interesting reading, especially the comments in regard to the tax amnesty introduced at that time. The present tax amnesty is even more generous than the one introduced in 1988. It represents a rather defeatist attitude in trying to get people to repay their taxes. Much has been said about the previous amnesty and the fact that it raised £500 million when it was envisaged that it would raise only £30 million. It is interesting to note that the previous amnesty sought a repayment of all due taxes. One can see the generosity of the present amnesty which proposes a 15 per cent interest rate.

Section 68 of the Finance Act, 1988, sanctioned the varying of certain outstanding interest charges and penalties when taxpayers were making up their total liabilities. It covered such matters as income tax, surtax, corporation profits tax, corporation tax, capital gains tax, value added tax, PRSI contributions, health contributions, employment and income levies. It is significant to note that those taxes were eligible for exemption from interest and penalty charges only. That is a significant point having regard to the fact that a two-tiered tax system is being introduced in this case. In this amnesty we are talking about unpaid personal income tax and capital gains tax with only 15 per cent of all taxable income being paid. Yet in other tax categories, such as capital acquisitions tax, stamp duty, the residential property tax, value added tax and corporation tax, all tax due must be paid. It is therefore apparent that the Minister is being extravangantly generous as far as defaulting taxpayers are concerned and that sets a bad example, especially for PAYE workers who are taxed at source.

Why did the Government decide to introduce a tax amnesty for those who failed to pay their taxes over the years and deprive us of proper education and health facilities, housing and so on? The Minister is appointing special tax collectors to deal with those defaulting taxpayers who decide to pay the arrears of income tax and capital gains tax and the names of those defaulters will not be made known to the Revenue Commissioners. Contrast that with Ray MacSharry's tax amnesty in 1988 by which £500 million was recovered. At that time the defaulters paid all the taxes and I do not think the same secrecy prevailed.

It is also interesting to note that from 1988 to the present day there has been a series of scandals which has rocked this country to its foundations and has damaged the body politic. We in politics have been tarnished by what is happening outside. The present amnesty would seem to compensate many of those involved in those scandals because I have no doubt that the money gleaned from the various property dealings was hived off into bank accounts abroad. These people can now bring that money back at 15 per cent. There will be a veil of secrecy over these individuals and they can be secure in the knowledge that the Revenue Commissioners or the Minister will never know who they are.

It is hard to reconcile such a benign tax regime for those tax defaulters with the treatment meted out to the likes of farmers and others who, when they try to reconcile tax arrears that have accumulated over the years and settle with the Department of Finance have found, if their debt is in excess of £10,000, that their names are published in Iris Oifigiúil. Such information is automatically extracted by the press and the names are published in the national newspapers. The Minister may say that these are taxes which should have been paid. However, in defence of those people, many of them often have to resort to borrowing or selling some assets in order to placate the taxman. It is hard to justify the fact that those people's names will be published if they owe over £10,000 while at the same time people who have invested millions in bank accounts abroad can bring money back under this amnesty and they will be entirely protected. Maybe the Minister should consider giving an amnesty to people who are trying to pay back tax arrears at least up to 14 January next. That idea may be worthy of investigation. I have a certain sympathy for those people, especially when I see what is happening with regard to the present amnesty.

In 1988 all tax arrears had to be paid under the much tougher tax amnesty. On 20 April that year the former Labour Deputy, Mr. Barry Desmond stated in relation to the amnesty: "It is fundamentally wrong because in three years time people will be baying for another tax amnesty, and perhaps a future Minister will introduce it". The only thing Barry Desmond got wrong was the time-scale. He said it would be three years, but it is almost five years. The Labour Deputies on the Government side seem to grasp this idea of a tax amnesty enthusiastically on the basis that it will bring money into the country and help to create jobs. I do not see the logic of that. By 14 January next year the Minister will have enough headaches trying to reconcile his budget to worry about creating jobs. I suppose that in order to placate their constituents and to be seen to be doing something they must market this idea, but it is a load of nonsense. The money retrieved will go into the national coffers to meet demands made on the Minister by the end of this year.

Mr. MacSharry was hailed as a very good Minister for Finance at the time of the last amnesty. He stated that tax defaulters would face a much more hostile climate in the future. I do not know about the hostile climate. All I know is that small businesses are being pressurised by the sheriff if they fall into arrears. They claim that the Revenue Commissioners have too much power and the Minister says on television that it would give him a certain amount of pleasure to put people in jail. On the other hand, we are introducing this amnesty for the big defaulters. I cannot reconcile that with what Mr. Ray MacSharry said in the past about a much more hostile tax climate.

It is interesting that under the last amnesty Ray MacSharry said that tax defaulters were being given a once off incentive to pay their arrears of tax. The result was a Pandora's Box of £500 million. Now we are back to the incentives again. What has gone wrong? An amnesty was introduced, sheriffs were appointed and attachment orders were introduced. In the past few years the Revenue Commissioners have been given more stringent powers and yet, five years down the road, we are introducing another amnesty. I wonder how much more powers the Revenue Commissioners want.

I am concerned about the measure allowing the Minister access to financial institutions to get information. There will be a lot of resistance if people think the Minister will have access to bank accounts. The Minister said recently that in this country there are 15 million bank accounts which is a lot for a country with our population. He said he had five different bank accounts with five different overdrafts. That area will give cause for a lot of concern. If the Minister is to go down the road of having access to bank accounts it would behove him to outline exactly what regulations will prevail. The Minister is cloaking this amnesty in secrecy and hopes to get money in from abroad and from this country as well. Along with all that he is looking for extra measures, but unless he specifies the circumstances in which he can have access to people's bank accounts people will be very concerned.

Mr. B. Ahern

On a point of order, at the moment the power of the Revenue Commissioners to access bank accounts is through the High Court. There is no other way. In 1986 the IMF recommended full attachment of bank accounts. Neither the Government of the day nor successive Governments did that and it is not being done under this legislation either. It was recommended on the basis that we were introducing self-assessment. Other countries, such as the UK, where there is no self-assessment do have access to bank accounts. I want to make it absolutely clear that we are not making that move.

Sitting suspended at 1.30 p.m. and resumed at 2.30 p.m.