Dáil Éireann debate -
Tuesday, 28 Apr 1998

Vol. 490 No. 2

Written Answers - Non-Resident Accounts.

Pat Rabbitte

Question:

70 Mr. Rabbitte asked the Minister for Finance if his attention has been drawn to reports that Allied Irish Bank had, during the early 1990s, some £600 million in 53,000 bogus non-resident accounts and that other banks operated similar systems; the investigations, if any, held into these allegations; the action, if any, taken by the Central Bank and the Revenue Commissioners; the penalties, if any, imposed on the bank in question; and if he will make a statement on the matter. [9875/98]

Minister for Finance (Mr. McCreevy)

The reports that there was a sizeable number of bogus non-resident accounts in AIB and other banks in the late 1980s and early 1990s have given rise to considerable, and understandable, concerns. I share those concerns. I am totally against tax evasion and I am determined to ensure it is dealt with as firmly as possible.

I have already indicated on several occasions that I have asked Revenue and my Department to look at whether new powers are needed for Revenue in tackling tax evasion. This review of Revenue powers is a wide-ranging one and includes the question of the extent of Revenue's access to bank accounts.

The Deputies will appreciate that the pursuit of particular tax cases is a matter for the Revenue Commissioners who must deal with them on a confidential basis. I can, however, say that on various occasions in the past Revenue has discovered individual cases where false non-residence declarations had been made by individuals for the purpose of evading tax on deposit interest. In all these cases, Revenue took action as regards the taxpayers involved, by recovering any underpaid tax and interest and penalties, as appropriate. I understand Revenue also raised the matter generally with certain institutions concerned in the early 1990s and was given assurances that steps had been taken to ensure compliance with the legislative requirements. I have been advised by the Central Bank that it was aware of the matter at the time and of the steps being taken, including those of the Revenue Commissioners, to correct the situation.

Before recent media reports of historic non-compliance in this area, Revenue had already commenced a review of the position generally. Its work includes an examination of ongoing controls, procedures and liabilities and, where considered necessary, involves an examination of liabilities in past years. The review covers all financial institutions and will take some time to complete.

I will keep the matter under review and will also be examining it in the light of the report of the Moriarty Tribunal so that whatever measures are considered necessary in this area will be put forward.