Vol. 522 No. 2
19 Mr. Rabbitte asked the Minister for Finance the progress made to date by the Revenue Commissioners in regard to the recovery of outstanding DIRT liabilities identified in the report of the DIRT sub-committee of the Committee of Public Accounts; and if he will make a statement on the matter. [18173/00]
I am advised by the Revenue Commissioners that DIRT returns for the 13 tax years from 1986-87 to 1998-99, inclusive, are being audited using the powers made available by the 1999 Finance Act.
The objective of the audit programme is to enable Revenue to compute the amount of tax underpaid, if any, by each deposit-taker together with the interest and penalties due. The focus of Revenue's DIRT look-back audits is on checking a sample of non-resident accounts, as provided for in the legislation, in each of the financial institutions concerned. The information gathered from checking the sample of non-resident accounts, together with the other information obtained by inspectors in the course of their audits, will allow Revenue form a view on compliance with the DIRT legislation in each institution and, where necessary, an estimation of the level, if any, of DIRT under-deducted by the financial institution.
Revenue has assigned 37 officers to work on a full-time basis on the project. In addition to the officers working full-time on the project, 30 inspectors from districts outside Dublin have been assigned for short periods, two to four weeks each, to assist in the audits.
Revenue has set itself the target of completing the computations of tax, interest and penalties by summer 2000. I am informed by Revenue that, overall, the project is on schedule but that a considerable amount of work still remains to be done. A generally high level of co-operation is being received from the financial institutions. If the DIRT arrears, interest and penalties due cannot be agreed in discussion with the deposit-taker, assessments will be raised on the deposit-taker by Revenue.
Provision has been made in section 68 of this year's Finance Act for the Revenue Commissioners to publish the results, including interim results, of their look-back DIRT audits, covering the years 1986-87 to 1998-99. Revenue is required to make a report to the Committee of Public Accounts before 1 November 2000. The Deputy will be aware that the sub-committee of the Committee of Public Accounts, which conducted the DIRT inquiry, carried out a full review of the progress made in implementing all its recommendations, including those in relation to the look-back audits, at the hearings on 20 June 2000.
As a member of the Committee of Public Accounts, I would like to ask the Minister one or two questions. At the initial stages of the inquiry, I asked representatives from the main financial institutions if they accepted they had broken the law. They admitted they had, and that is on the record. In other words, their organisations defrauded the State of many millions of pounds of taxpayers' money.
The Minister's Department told publicans that if they did not pay their taxes, they would not get licences and that was very successful. Given that these representatives freely admitted they defrauded the State, will the Minister consider refusing to re-license financial institutions on the basis that they have not yet paid the money of which they defrauded the State?
The Committee of Public Accounts made a variety of recommendations as to what should be done. I have given replies in the Dáil on the progress made in my Department. The sub-committee met the Revenue Commissioners and others last week to see how its recommendations were progressing. I do not recall a recommendation from the Committee of Public Accounts along the lines the Deputy is now suggesting. Perhaps I can take it he did not put that suggestion to the Committee of Public Accounts, or maybe he is about to do so. He could take it up with the committee.
I would like to ask a further question because the Minister has not answered me. In replies to questions asked by me, it was admitted that these financial institutions were effectively breaking the law, and that is on the record. Will the Minister introduce the necessary regulations or refuse to re-license these financial institutions until they pay the money of which they defrauded the State? If we were talking about a PAYE worker, there would be no doubt about that. Will the Minister, who is normally very frank and honest, initiate proceedings against these financial institutions?
It is the intention of the Revenue Commissioners to provide an interim report and a final report as to the amount of the assessments that will be raised. I understand they hope to complete their work this month. They will then enter into negotiations and if they cannot get agreement on the amount of money which has been underpaid by the financial institutions in respect of DIRT, they will raise assessments. If the assessments are challenged, it will have to go through the normal procedures and we will have to take it from there. I envisage that we will collect a lot of money from the financial institutions arising from the look-back audit from 1986-87 to 1998-99. Any further matters can be considered then.
I put it to the Minister that the financial institutions are well advanced in estimating the amount of DIRT they owe to the Revenue Commissioners. Is it the policy of the Government that the Revenue Commissioners will pursue individual depositors to recover outstanding tax rather than just pursing the institutions which have liabilities?
The Revenue Commissioner have not yet completed their work on the financial institutions. As I said in reply to Deputy Bell, when they do that, they will compute the liabilities due. If they are all agreed, they will be paid. I am sure further matters will then be considered by the Revenue Commissioners. Deputy Noonan asked what will be the position on the underlying deposits in the institutions when this is all over – hopefully, by the end of this year – and the financial institutions have paid up or the matter has progressed. That is an operational matter which the Revenue Commissioners would then have to consider.
It is a policy matter for the Government, it is not an operational matter.
Deputy Noonan would want to be very careful. The evasion of tax by any person is an offence and it is the job of the Revenue Commissioners to pursue taxpayers if they have not paid their taxes. At present the deliberations are with the financial institutions as to their liability because they did not deduct DIRT properly. When the Revenue Commissioners are finished with the financial institutions and receive the correct amounts of money which they owe to the State, it will then be a matter for the Revenue Commissioners to look, if they have sufficient information, at the underlying individual deposit holders if they consider an individual deposit holder is in breach of the law regarding his or her tax liabilities. That is the position that applies to the Deputy, to me and to everybody else.
Is the Government neutral on the issue?
The Government is certainly not neutral on the issue. The laws on taxation are passed by the Houses of the Oireachtas and it is the job of the Revenue Commissioners to collect those taxes without fear or favour, not only from institutions, but also from individuals. The financial institutions, which have been evading their responsibilities, must pay DIRT, together with interest and penalties, and that will be agreed with the Revenue Commissioners. If individuals evaded their responsibilities, they too will suffer the full rigours of the tax law.
I would like to give the Minister the opportunity to respond to allegations made at the Committee of Public Committee that his Department has been unacceptably slow in carrying out those recommendations which relate to his Department.
A number of people in my Department have been doing little else since the report of the Committee of Public Accounts and have been dealing with all the recommendations which relate to matters within the remit of the Department of Finance. I am satisfied they are doing everything within their power to expedite matters.
Written answers follow Adjournment Debate.
