Written Answers. - Departmental Correspondence.
Enda Kenny
Question:
192
Mr. Kenny
asked the
Minister for Finance
if he is now in a position to answer correspondence delivered to him some time ago in regard to a person (details supplied) in County Donegal; if he will provide a detailed response to this query; and if he will make a statement on the matter.
[4908/03]
Correspondence was received both directly from the individual concerned and on his behalf on the issue of tax evasion and a detailed reply issued. Further correspondence was received and a reply will be issued shortly. The main question posed by the person concerned was on the lack of prosecutions of tax evaders in the DIRT context and, in particular, whether the financial institutions that facilitated bogus non-resident accounts would be prosecuted.
In reply, I pointed out that the administration of the tax system is a matter for the Revenue Commissioners in accordance with their care and management powers provided under the tax Acts. In addressing any case of non-compliance with tax law, the Revenue Commissioners must decide whether it is more appropriate to investigate the case with a view to prosecution or with the objective of arriving at a monetary settlement covering the tax, interest and penalties due. In responding to the revelations of widespread non-compliance in the operation of DIRT, the Revenue Commissioners took the view, having been granted the necessary powers by the Oireachtas in the Finance Act 1999 to undertake on site DIRT audits of financial institutions, that look-back audits should proceed expeditiously in order to recover the substantial liabilities concerned. Revenue received co-operation from the financial institutions in these audits and a total of €220 million or £173 million was paid in tax, interest and penalties in settlement of those investigations. The position is that had Revenue investigated with a view to prosecution there would probably not have been the relatively quick resolution that followed which resulted in payment to the Exchequer of €220 million.
An investigation with a view to prosecution is a long, painstaking and resource intensive process. The evidence, sufficient to sustain a prosecution, has to be gathered in a manner acceptable to the courts and the rights of the taxpayer cannot be infringed in the process. If proper procedures are not followed, the evidence may be rejected by the courts. A prosecution cannot be initiated unless sufficient quality evidence is available. However, where evidence considered sufficient to sustain a prosecution is available, a file will be sent to the Director of Public Prosecutions. Prosecution is a matter for the DPP.
Clamping down on tax evasion is an ongoing process and Revenue's powers in this regard are kept under ongoing review. In so far as tax avoidance is concerned, I have been to the fore in identifying and closing loopholes where these are brought to my attention. The recently published Finance Bill includes 12 different anti-avoidance measures.
The person recently raised the findings of the report of the Comptroller and Auditor General 2002 which detailed a number of cases of tax evasion. Arising from the report, the Revenue Commissioners have changed their procedures and, further, have brought forward a number of legislative proposals. As these raise significant legal and other issues they require detailed examination by my Department in consultation with the Revenue Commissioners and other relevant Departments. I will consider carefully the outcome of this examination.
