Written Answers. - Non-Resident Accounts.

Gerard Murphy

Question:

151 Mr. Murphy asked the Minister for Finance his views on whether banks which set up bogus accounts without the knowledge of clients have caused huge distress and anxiety, not only to the account holders but also to their families. [11003/03]

Gerard Murphy

Question:

152 Mr. Murphy asked the Minister for Finance his views on whether banks which set up bogus accounts with or without the knowledge of their clients should be held accountable and should be made pay fines to the State and compensation to their clients. [11004/03]

Gerard Murphy

Question:

153 Mr. Murphy asked the Minister for Finance his views on whether the banks misled many of their customers and told them no tax was payable on their savings in so-called bogus accounts. [11005/03]

Gerard Murphy

Question:

154 Mr. Murphy asked the Minister for Finance if he has considered investigating the banks' role in the setting up of bogus accounts as many account holders maintain they were totally unaware that their savings were held in bogus accounts. [11006/03]

Gerard Murphy

Question:

155 Mr. Murphy asked the Minister for Finance the number of so-called bogus account holders who have settled with or replied to Revenue Commissioners by the 27 March deadline; the amount of revenue this will yield; and the information available on the size of accounts in euro or settlements made. [11007/03]

I propose to take Questions Nos. 151 to 155, inclusive, together.

There is a statutory obligation on taxpayers to make correct returns of their tax liabilities and pay the correct taxes due for all years of assessment. Where it becomes known to the Revenue Commissioners that tax has been underpaid it is their responsibility to recover the unpaid taxes together with interest and penalties.

In the case of bogus non-resident account holders, Revenue provided an opportunity to those who had underpaid their taxes to make voluntary disclosures of the undeclared income, together with payment of the resulting tax liability and an amount of interest and penalties, capped at 100% of the tax liabilities, before 15 November 2001. This voluntary disclosure scheme, with its favourable settlement arrangements, was widely publicised, as was Revenue's clear intention to vigorously pursue those who did not avail of it.

As many as 3,675 account holders chose to avail of the voluntary disclosure scheme and paid €227 million in total. Revenue is now investigating individuals who did not avail of the scheme. Their details are being extracted from the lists of bogus non-resident account holders being supplied to the Revenue Commissioners by the financial institutions under High Court orders. To date Revenue has issued letters on 11 October 2002 and 20 January 2003 concerning 35,000 non-resident accounts. There was a very high response rate to the inquiry letters both from individuals who have a liability and from others whose circumstances indicate that there is little or no liability. At present it is not possible to supply the detailed information requested because of the large volumes of responses received and which are still being processed. Revenue has informed me that €161 million has been paid by approximately 4,200 taxpayers. This is in addition to the €227 million which was paid before the 15 November 2001 deadline by 3,675 taxpayers. The numbers and amounts of these payments are likely to increase in the future. It is not possible to estimate what additional numbers and values of settlements will be made with Revenue in the future.

It is a matter of regret that this issue may now be a cause of distress and anxiety to some of the individuals concerned. However, Revenue must continue to pursue the outstanding taxes. Revenue encourages anyone contacted by it or who anticipates such a contact to get in touch with their local inspector of taxes so that the particular facts of their position can be established as quickly as possible.

In 1999 and 2000 Revenue conducted on-site DIRT look-back audits on 37 financial institutions. This exercise was reported on to the Oireachtas Committee of Public Accounts and resulted in the payment of €220 million in respect of tax, interest and penalties.
The focus of these audits was the extent to which the financial institutions had complied with the DIRT legislation. As is clear from the outcome of the Revenue audit programme, there was a significant non-compliance position on their part. The audit also revealed many Irish resident taxpayers held bogus non-resident deposit accounts.
I have no evidence or knowledge in regard to the arrangements entered into between the financial institutions and their clients. Therefore, it would not be appropriate for me to comment on the question raised about compensation. If individuals feel that there are circumstances which justify compensation, it is a matter for them to pursue.