Vol. 515 No. 1
26 Mr. Noonan asked the Minister for Finance if his attention has been drawn to the concern among IFSC banks regarding certain audits being undertaken by the Revenue Commissioners of non-resident accounts; his views on whether these audits are necessary; if he will give an assurance that the continuance of these audits will not damage the IFSC; and if he will make a statement on the matter. [5291/00]
I am aware that the Revenue Commissioners have been undertaking a look-back DIRT audit in relation to all financial institutions in the State. Such an audit was recommended by the report of the Committee of Public Accounts on the operation of DIRT which was published in December 1999. I am also aware that the chairman of the Financial Services Industry Association has written to the chairman of the Revenue Commissioners expressing concerns at documentation compliance issues in relation to DIRT which may arise in the case of certain IFSC banks and at the possible need for inclusion of notes in the accounts of the parent companies dealing with the question of contingent liabilities. Similar issues arise in the case of the domestic banks. These are matters for the Revenue Commissioners who have arranged to meet the FSIA to discuss the issue.
Is the Minister aware of the views of the chairman, Mr. Bolger, that irreparable damage will be done to the financial services industry if Revenue continues to pursue these audits? When did the Minister first become aware of this difficulty? What submissions were made to him on this issue? Why is action only being taken now, when interested parties have been forced to make it a public controversy to force the Minister to act?
The Financial Services Industry Association wrote to me about this matter last week. I understand the same letter was sent to the chairman of the Revenue Commissioners and the Taoiseach. I am aware of the problem. This is primarily a matter for the Revenue Commissioners who were given powers by the Finance Act, 1999 and previous Acts, to deal with these matters. They have considerable discretion to deal with this matter under the care in management provisions of the Act. The FSIA will meet the chairman of the Revenue Commissioners later this week to discuss the matter further. It would be totally inappropriate for me to become involved with these issues at this stage. I am concerned about any damage done to the IFSC although as I said in my reply, this problem also relates to domestic banks. As Deputy Noonan will recall, there was considerable discussion of the roles of the Department of Finance and the Minister vis-à-vis the Revenue Commissioners. We should draw some lessons from this. I am satisfied that the proper course is being pursued. A meeting has been arranged between the FSIA and the chairman of the Revenue Commissioners.
Did the Minister take any action on receipt of the letter from Mr. Bolger last week? Did he have any discussions on this matter with the chairman of the Revenue Commissioners or the Taoiseach? It is appropriate for the Minister, who has responsibility for the success and management of the Irish Financial Services Centre, to concern himself with this matter and protect the industry. Has he done anything?
Lessons should be learned from the inquiry of the Committee of Public Accounts. The look-back audit of all these financial institutions by the Revenue Commissioners is ongoing. The Revenue Commissioners are empowered by various Acts to enforce the law without fear or favour. They have discretion under care in management provisions to deal with these issues. That is what they are doing with these 37 financial institutions. Some difficulties have arisen and I understand a meeting is taking place this week between the Revenue Commissioners and the FSIA regarding the interpretation of the law. We would all be advised to allow that matter take its course. I have not discussed the matter with the chairman of the Revenue Commissioners.
Or the Taoiseach?
No.
Is the Minister talking to the Taoiseach?
Daily. We have a better relationship than that of the Deputy and the former Deputy Noonan.
He has retired from politics and is living in Bruff, County Limerick.
