Dáil Éireann debate -
Thursday, 2 Feb 1995

Vol. 448 No. 5

Adjournment Debate. - Armed Robbery at Dublin Premises.

Mr. E. Byrne

One of the most disturbing aspects in the aftermath of the Brinks Allied robbery is that a respected Dublin journalist may have been shot because she revealed that a well known Dublin crime boss used a tax amnesty to declare £200,000 of unearned income and that he had declared earnings of more than £30,000 from rent on properties over the past three years.

The tax amnesty must be investigated to see if it was used to launder money either stolen or obtained by other illegal means such as, profits from the drugs trade, blackmail or kidnapping. The fact that a tax amnesty could have been conceived or supported by any politician, and provided those criminals with a guarantee of confidentiality, must rank as the biggest political scandal and miscalculation in the 1990s. When the tax amnesty was introduced in 1993 we, in Democratic Left, branded it as a cheat's charter. The tax amnesty has proven to be a charter for crooks, not just small time rogues, but the gangland rulers for whom organised crime is proving increasingly profitable.

In 1993 the country's grateful criminals were presented with a financial bolt hole, a bargain basement licence to launder the proceeds of their illegal activities and no questions were asked. Members who check our contributions in the Official Report will see that Veronica Guerin's revelations came as no surprise to those of us who warned that the amnesty would be used to stash away the proceeds of everything from robberies to drug dealing. How many more criminals availed of the amnesty?

Irish taxpayers, particularly those in the PAYE sector, have been crucified down the years with a heavy tax burden and they share my outrage that gangsters could be rewarded and made respectable by legislation passed through this House. While I welcome the Minister's commitment given here of her intention to bring this country into compliance with the European Union Directive on Money Laundering, which when brought into force will impose disclosure obligations on financial institutions and other bodies, it will not go far enough. Our Government will need to go one step further by taking the necessary steps to reverse the effects caused by the confidentiality clause in the 1993 tax amnesty in order to take action to expose and root out those criminals who availed of the tax amnesty to launder their ill-gotten gains.

I appeal to the Minister to take the necessary bold steps and I would like to believe I have the support of both Deputy Davern and my Government colleague, Deputy Kemmy, for the Government to take up my position. I look forward to the Minister's assurance that she intends to ruthlessly pursue those gangsters who used the tax amnesty to launder ill-gotten gains.

Minister of State at the Department of Finance (Mr. Hogan)

I thank Deputy Byrne for raising this important matter.

It will be clear to the House that I have no information relevant to the press reports mentioned by the Deputy and it would be wrong of me to engage in speculation in this area.

I want to make it clear at the outset that the amnesty scheme provides no protection against tax liability on foot of income from an illegal source. The legislation on the 15 per cent incentive amnesty clearly anticipated this issue and specifically excluded from that amnesty tax in respect of income arising from illegal sources or activities. Where a person sought to use the incentive amnesty in respect of income from such activities they would not be entitled, under the legislation, to any of the benefits of the amnesty. The person would remain liable to pay the full tax together with interest and penalties.

The legislation provided for two separate schemes: an incentive amnesty under which certain liabilities to income tax and capital gains tax together with interest and penalties could be discharged by payment of 15 per cent of the underlying income or gains, and a general amnesty under which other tax arrears had to be paid in full with remission only for interest and penalties. To obtain the benefits of the amnesty, all pre-April 1991 tax arrears of the person concerned had to be cleared by 14 January 1994.

Among the exclusions from the 15 per cent incentive amnesty was tax on income or gains which arose from illegal sources or activities. Accordingly, income from such sources did not qualify for inclusion in a declaration under that amnesty. Tax on income from such activities was required under the scheme to be paid in full by 14 January 1994.

One of the conditions of the incentive amnesty was that a person had to make and sign a declaration form which included an undertaking that no part of the declared income or gains arose from unlawful sources or activities. If a person included income or gains from illegal sources or activities in an amnesty declaration, the declaration would be false. A person who made a false declaration is not entitled to any of the benefits of the amnesty and, accordingly, remains liable to the full tax, interest and penalties. In addition, the making of a false declaration is an abuse of the amnesty scheme. In accordance with the amnesty legislation the person concerned would be liable to severe penalties, including imprisonment, which were introduced specifically to curb abuse.

The administration of the amnesty scheme was a matter for the chief special collector and the Revenue Commissioners. The legislation provided for the making of a declaration under the 15 per cent incentive amnesty to the chief special collector on a confidential basis. As I have said, however, a person who made a false declaration is not entitled to any protection under the amnesty. Furthermore, the person would not be protected against investigation where there were reasonable grounds to show that a false declaration had been made. Where there is hard evidence that a person had undisclosed income from illegal sources there are provisions under the legislation for challenging any declaration he may have made under the incentive amnesty.

Speaking generally, it is debatable whether criminal elements would have been worried at all about obligations under the amnesty law or would have sought to declare amounts under the incentive amnesty. However, what I am saying is that the problem of income and gains from illegal sources was anticipated and that the use of the 15 per cent incentive amnesty in relation to such income or gains was legislated against, so as to ensure that benefit would not be obtained by anybody who might seek to use the amnesty as a money laundering device. I will take on board the points made by the Deputy and have the matter investigated further.