Dáil Éireann debate -
Tuesday, 22 Oct 2002

Vol. 555 No. 5

Written Answers. - Non-Resident Accounts.

Seán Haughey

Question:

184 Mr. Haughey asked the Minister for Finance his views in relation to the efforts by the Revenue Commissioners at this time to collect outstanding tax from the holders of bogus non-resident bank accounts; his further views on the imposition of surcharges, penalties and interest in these cases; his views on whether the banks also should be held to account for these activities; if account holders who might experience extreme hardship as a result of trying to pay their tax bill have any remedy at this stage; and if he will make a statement on the matter. [19106/02]

Minister for Finance (Mr. McCreevy)

The Final Report of the Public Accounts Committee inquiry into deposit interest retention tax, DIRT, recommended that: "The Revenue Commissioners give consideration to dealing with the assessment and collection of the underlying tax in a pragmatic and effective manner while safeguarding the overall tax revenue of the State." The underlying tax referred to is the tax which should have been paid on moneys deposited in bogus non-resident accounts. In many instances, moneys lodged, often systematically over many years, represent income which should have been declared for tax purposes and the tax paid many years ago.

I understand that the Revenue Commissioners are collecting the outstanding taxes from bogus non-resident account holders in a pragmatic and effective manner. Under the voluntary disclosure scheme which ended on 15 November last, 3,675 account holders made disclosures in respect of 8,380 accounts and some €227 million was paid. Of this figure, almost half, €113 million, represented interest and penalties.

Since 15 November 2001 a further €21 million has been collected from other individuals. Over the last ten days or so, inquiry letters have issued to some 30,000 individuals with Irish addresses, in respect of 13,500 non-resident accounts, who were identified on foot of information received from financial institutions. The Revenue Commissioners were provided with the necessary power to obtain this information by High Court order, under legislation enacted in the Finance Act, 1999.

In the current phase of the investigation, people who receive the inquiry letters from the Revenue Commissioners are being offered the opportunity to co-operate and so avoid investigation for further enforcement action and prosecution. Full penalties and interest under the legislation will be imposed on defaulters who did not avail of the voluntary disclosure scheme. Furthermore all such settlements with the Revenue Commissioners will be published where the amount of the settlement exceeds €12,700.

The interest and penalties element of these settlements are likely to amount to significantly more than the actual tax due. I am advised by the Revenue Commissioners that they will consider claims as regards inability to pay on a case by case basis in accordance with normal practice in this area. However, they also advise that account holders cannot escape their responsibilities by divesting themselves of the accounts and other assets. These cases will not be considered to be hardship cases and the Revenue Commissioner's powers will be brought to bear to collect the full amount due.

In relation to the accountability of the financial institution, the Deputy will recall that the DIRT "look-back" audits of those institutions which were conducted in 1999-2000, collected some €220 million in all. This comprised tax of almost €90 million and interest and penalties of some €130 million, or 145% of the tax.