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Dáil Éireann debate -
Tuesday, 23 Mar 2004

Vol. 582 No. 3

Other Questions.

Offshore Accounts.

I remind the House that as well as being subject to six minutes overall, supplementary questions and the answers are limited to one minute.

Breeda Moynihan-Cronin

Question:

8 Ms B. Moynihan-Cronin asked the Minister for Finance the progress made to date by the offshore assets group of the Revenue Commissioners in its investigations into the use, for the purposes of tax evasion, of offshore bank accounts and trusts by Irish residents; the total amount of such funds identified so far; the total amount of tax collected in respect of these accounts; and if he will make a statement on the matter. [8935/04]

Michael D. Higgins

Question:

19 Mr. M. Higgins asked the Minister for Finance the response received to date by the Revenue Commissioners to the letters sent by ten top banks to 120,000 customers warning them that they had five weeks to regularise their tax affairs; the number of responses received; the amount collected to date; and if he will make a statement on the matter. [8926/04]

I propose to take Questions Nos. 8 and 19 together.

I am informed by the Revenue Commissioners that substantial progress is being made in this inquiry. Arising from an earlier part of the inquiry, 254 individuals with trust operations in a particular offshore institution came forward, made voluntary disclosures and, to date, have paid €105 million. Subsequently, 1,300 individuals with accounts in another offshore institution came forward, made voluntary disclosures and paid €45 million to date.

Following these disclosures, in December 2003 the chairman of the Revenue Commissioners met with the chief executive officers of the ten main Irish financial institutions which have offshore subsidiaries or branches and they agreed to co-operate with Revenue in a major initiative to tackle tax evasion by Irish residents using offshore accounts and structures.

These financial institutions wrote to their customers in mid-February advising them of the Revenue investigation and of the voluntary disclosure regime operated by Revenue. This allows people to make a voluntary disclosure up to 29 March 2004 and they must then pay the tax, interest and penalties involved by 28 May 2004.

I am advised by Revenue that it understands from the financial institutions that up to 120,000 letters may have issued. However, some individuals would have received more than one letter because they had accounts in different banks or in different branches of the same bank. A substantial number of individuals have made contact with Revenue both through its offshore assets group and directly to Revenue district offices regarding the voluntary disclosure scheme. It is not possible, therefore, to say how many individuals are involved, nor is it possible at this stage to give figures on the numbers of voluntary disclosures that will result from this initiative. Previous experience indicates that the majority of disclosures will be received close to the deadline of 29 March and that most payments will not be received until near the payment deadline of 28 May 2004.

The general publicity surrounding these inquiries to date has also prompted other individuals to come forward and make unprompted voluntary disclosures bringing the total amount paid to date to in excess of €180 million.

Is the Minister disappointed or embarrassed by the number of prominent Fianna Fáil figures including Mr. Burke, Mr. Lawlor, Deputy Collins, former Minister and Commissioner, Padraig Flynn, his daughter, Deputy Cooper-Flynn, and most recently at the weekend, the former Senator O'Callaghan, who have serious questions to answer in regard to offshore accounts and difficulties with the taxman? Does the Minister anticipate that many more members of Fianna Fáil will have to come forward in regard to these matters?

The Minister referred earlier to saving money on the tribunals. If Fianna Fáil was to address these issues——

I have to remind the Deputy about the one minute time limit on supplementaries.

——as a party, would it effect serious savings? Was there a culture of tax avoidance within Fianna Fáil in that so many prominent members appear subsequently to have had difficulties in that regard? Could the Minister comment on that?

It is the duty of everybody to keep their tax affairs in order and to abide by the law of the land, particularly as it relates to taxation. That has been my position as Minister for Finance. Everybody has to abide by the law, irrespective of their political allegiance. I have no idea as to the numbers of people who will avail of voluntary disclosure or make any other tax payment to the Revenue in terms of the party to which they belong.

Does the Minister have any words for the banks because many of those receiving the letters are understandably in distress and claim, with some justification, that the banks led them into these schemes? Is the Minister aware whether any banking companies propose to make arrangements to assist their current and former clients in addressing their liabilities and responsibilities with the Revenue Commissioners? Many of those involved are probably in their latter years. Would the Minister expect the banks, as good corporate citizens, to show some consideration for actions on their part which may have led their clients to evading taxes?

It is a matter for the individual to keep his or her tax affairs in order and to abide by the law.

Does the Minister have sympathy for small account holders who opened accounts across the Border, only a mile or two from home, simply for shopping or other purposes over the years? These accounts were opened in the 1970s and 1980s before the break with sterling. These people do not know what to do or where to go. They cannot afford to go to accountants because that would cost more than is in the accounts altogether but they have to make returns before the end of this month. Can the Minister offer any leniency towards a person who is 87 years of age and now holds two very small accounts and must deal with that? Like Deputy Burton, I wish to hear what the Minister has to say about the many who were advised by banks to avail of those accounts.

It is not illegal to have an offshore account and many businesses require such accounts to conduct their businesses. Many individuals hold accounts in Northern Ireland, particularly for shopping trips, making payments in sterling or receiving UK pensions or education grants. This is not an offence, but the difficulty is whether those funds have been taxed or are taxable. Anybody here may hold an account in Northern Ireland or the UK. The question arises as to whether the funds in those accounts were legitimately taxed here and if they earned money abroad whether tax was paid on that here? Tens of thousands of people have legitimate accounts in Northern Ireland for spending purposes, making sterling payments and going on holiday in sterling areas. The banks may have written——

What about payment of pensions?

Some people were paid their pensions in sterling and kept an account in Northern Ireland or the UK in sterling not to lose on the conversion to the Irish pound or the euro. There is nothing wrong with that provided that the income in that account and the interest, if it earned any, was legitimately taxed. Many thousands of people apart from businesses have legitimate accounts of that kind and that is not a problem. The banks as part of this exercise have probably written to all their customers but that does not mean that those people have a tax liability. The question simply is was the money in those accounts taxed at source and, if the account earned money, was that taxed? I hope that clarifies the issue for the people to whom Deputy Crawford referred.

The greatest number of defaulters on the list of those who settled with the Revenue Commissioners came from Cork city and county. Have the Revenue Commissioners informed the Department whether there is a geographical reason the highest proportion came from that area? Does the Minister intend initiating an investigation as to why that seems to be the case as it includes a former Member of the other House and a serving county councillor for Fianna Fáil?

There is no particular reason one county should have more tax settlements than another apart from the number of citizens in that county. In the past year many of the settlements with the Revenue Commissioners were for bogus non-resident accounts. Many of those were held in the area between the northern and southern seaboards. The figures given by the investigation of the Committee of Public Accounts showed that many accounts were held in that area. Consequently, settlements are now being reached and this would have a disproportionate effect in some counties. That is my interpretation of the figures. I have no more information beyond what is written in the newspapers in that regard.

The tranche which the Revenue Commissioners, in conjunction with the financial institutions, are investigating arises from a power which I gave the Revenue Commissioners in the Finance Bill. The ten financial institutions had agreed to co-operate with the Revenue Commissioners but I copperfastened the legislative base in a section of the Finance Bill. Therefore, the financial institutions have written to their customers, to many of whom Deputy Crawford referred, who will not have a tax liability because their accounts are legitimate. There will, however, be many people who will have large settlements to make with Revenue as a result of this clause. I have no idea how much that will raise. We will know in the next two years.

Non-Resident Accounts.

John Perry

Question:

9 Mr. Perry asked the Minister for Finance his views on the recommendations (details supplied) of the Revenue Powers Group. [8657/04]

Jan O'Sullivan

Question:

63 Ms O’Sullivan asked the Minister for Finance the progress made by his Department and the Revenue Commissioners in their consideration of the recommendations of the Revenue Powers Group; when he expects a decision will be made on its recommendations; and if he will make a statement on the matter. [8939/04]

I propose to take Questions Nos. 9 and 63 together.

I established the Revenue Powers Group, chaired by Mr. Justice Frank Murphy, to examine Revenue's main statutory powers and report to me on changes needed. As I pointed out to Deputies in my response to several parliamentary questions regarding the Revenue Powers Group last month, I am very grateful to the group for its considerable efforts in producing the report within a demanding timescale. I have decided to allow a period for debate and public reflection on the many and varied issues with which the report deals. Thus, with one important exception that would have arisen anyway — a power to allow Revenue access information held by a non-resident entity over which a domestic financial institution has control — I am not implementing any of its recommendations in this year's Finance Bill but will review all the group's recommendations for next year's Bill.

My Department and the Office of the Revenue Commissioners are examining the contents of the report. Given my view that it is appropriate to allow time for these issues to be considered, I do not consider it appropriate to comment at this time on individual recommendations.

Is it not very difficult to have a debate and reflection if the Minister sits on his hands and says nothing? Surely the essence of debate and reflection is that there is an exchange. The Revenue Powers Group proposed that there be access to telephone records, which is a reasonable provision if there is a clear protocol as to when it would happen. In other words, it should not be the first step in an investigation. The power suggested to question those detained by the Garda for revenue offences is also reasonable, provided it is set in a context outlining the circumstances in which these powers may be used. I have no problem either with the proposal that taxpayers need to satisfy the Revenue Commissioners that payments coming from "have" countries, that is those with which we do not have a double tax agreement, are bona fide commercial payments. I would like to hear the Minister's views on those proposals which suggest prudent tightening of the Revenue's powers. Will the Minister say whether concerns have been addressed to him or whether he has views on these matters from his experience?

It was my idea to set up a Revenue Powers Group. I promised it in the Finance Bill in 1998, perhaps on Report Stage, but did not get around to organising it until 2003. One of the terms of reference for the group was to advise me as to the appropriate balance between the need to secure the revenue of the State and the rights of the taxpayer. With regard to the three points raised by Deputy Bruton, it is important to get the appropriate balance between the powers of the Revenue Commissioners and the rights of individuals.

In my time as Minister for Finance I have given fairly draconian powers to the commissioners. The Finance Bill 1999 gave additional powers to those given in previous finance Bills and we now have a body of Revenue law which gives much of the balance to the Revenue Commissioners. Therefore, in setting up this Revenue Powers Group, I was anxious to bring back an appropriate balance between the various areas. Matters such as access to phone records and the right to question people in custody, matters to which Deputy Bruton referred, are at the kernel of the appropriate balances being struck.

The Revenue Powers Group fulfilled the recommendation as part of a package. I am not normally reluctant to give my opinion on various matters but on this matter I would like to hear the views of representative bodies, the various institutes involved in the area, the Joint Committee on Finance and the Public Service and the advice of the Deputy and other individuals before making my decision. It would not be appropriate that when the group reports, I would just set out what I personally think of what we have done in a number of areas. I decided to give this period of reflection before next year's Finance Bill. Then having considered all the issues, I will make a decision as to what should or should not be included in the Finance Bill 2005.

The Minister is correct in saying that the Revenue Powers Group must draw a distinction between the compliant taxpayer, who should not be excessively intruded upon, and a tax evader or tax fraudster. While I welcome the statement by the Revenue Powers Group regarding provisions for honest mistakes, partially reflected by the Minister in this year's Finance Act, I am concerned that some of the recommendations could constitute a significant softening of the line against tax evasion. Perhaps the Minister will have an opportunity to comment in detail on this. For instance, significant recommendations are made concerning mitigation of penalties and publication of the names of defaulters with regard to penalty levels.

I am particularly concerned that the group is entirely composed of eminent tax practitioners, presumably highly paid, or persons related to tax practice in terms of work. Does the Minister agree that these tax practitioners, given as they are to selling the practices of tax avoidance, are unlikely to feel the level of rage that ordinary compliant taxpayers feel about what has gone on with regard to tax evasion here over the past 20 years? Will the Minister reconsider the representativeness of this group so that compliant taxpayers — not tax practitioners making money out of tax avoidance — who have paid their whack for 20 years will have an input into the deliberations? Their input would result in something more active against tax fraud.

I remind the Deputy that this group has concluded its work and will not sit again. I am thankful to it for speedily reporting to me. The group was chaired by Mr. Justice Frank Murphy and its members were cross-representative. The group examined Revenue powers and assessed the main statutory powers available to the Revenue Commissioners. Naturally, the people I asked to sit on it were people with experience in the particular area. Mr. Justice Murphy, a retired justice of the Supreme Court, chaired the group and produced the report expeditiously.

Deputy Bruton referred to some of the additional recommendations. One of the additional recommendations to which he referred and the only one I took from the Revenue Powers Group was the matter to which the previous question referred. Most people would say that they want more powers given to the Revenue Commissioners. The group has recommended some changes in other areas.

I am trying to abide by my self-imposed silence with regard to my views on publication. The publication figure of £10,000 was introduced a long time ago. It has been suggested by many people — I have not changed it in my seven years as Minister for Finance — that we should have a different publication figure now because so many people are included in the list that if we set the figure at a higher level, greater odium would fall on those whose names were published. That is one view. I am willing to listen to views from all quarters on this matter before making a decision for next year's Finance Bill.

I do not wish to inhibit anyone regarding what they want to say. Deputy Burton has a particular way of looking at this area but other Deputies may look at it differently. When I have heard everybody, I will decide what to include in next year's Bill.

Does the Minister accept that part of the equation regarding the effectiveness of Revenue powers relates to the question of resources and that while the Revenue Commissioners have not asked for additional resources there are systemic problems within the commission. Some of these relate to the turnover of staff and specialisms which are not quickly enough addressed and which affect audits being done around the country. The matter has been partially addressed but there is constant referring of decisions upwards rather than the devolution of many of these decisions at local and regional level.

Massive changes have taken place in the operation of the Revenue Commission over the past 25 years, and all have been for the better. As someone who has spent over 30 years involved in accountancy and who has had many dealings with the commission in my working life, I am aware of the enormous changes that have taken place. I compliment the commission on how it has changed over this period.

The Revenue Commission is organised in a certain way. Its manual of instruction has changed over the years and it has changed the manner in which it makes decisions. It tries to get as much as possible done at the lower levels and to allow people make their own decisions. However, it is important that there are checks and balances within the organisational structure. The commission has made tremendously positive changes over the years — and I do not say this because I am Minister for Finance — to try to strike the right balance. I am sure it would accept that sometimes it has not got the balance right. It is important for everyone's satisfaction that there are various levels of reporting. It can happen that if a wrong decision is made at lower level, the top level gets much of the blame for it. The commission has tried to devise a system over the years to have the appropriate levels of responsibility. In my view it works exceptionally well.

State Laboratory.

Kathleen Lynch

Question:

10 Ms Lynch asked the Minister for Finance the total costs incurred to date arising from all aspects of the transfer of the State laboratory from its present location at Abbotstown to its new location at Backweston; the estimated final cost of the transfer; if compensation has been paid to staff for the transfer; if all the staff have agreed to transfer; the steps that are being taken to ensure that the transfer does not lead to further delays in the completion of tests, especially in view of the serious concerns expressed by coroners at the delays in inquests; and if he will make a statement on the matter. [8930/04]

Fergus O'Dowd

Question:

13 Mr. O’Dowd asked the Minister for Finance if his attention has been drawn to the delays in the State laboratory; and if he will make a statement on the matter. [8705/04]

Joe Costello

Question:

39 Mr. Costello asked the Minister for Finance if his attention has been drawn to the serious concern expressed by coroners at delays in inquests as a result of the inability of the State laboratory to complete test results; the steps being taken to deal with this situation in view of the distress caused to families by such delays; and if he will make a statement on the matter. [6259/04]

I propose to take Questions Nos. 10, 13 and 39 together.

The costs incurred to date of building the new State laboratory is €53.3 million. In addition, €9 million has been provided for equipment in the 2004 Estimate for the State laboratory, but none of this has been spent to date. I have also sanctioned up to six supernumerary posts for the laboratory to manage the procurement of equipment and the actual relocation. The estimated cost of these for the transitional period is approximately €165,000. The overall final cost of the facility at Backweston is estimated to be €87.5 million.

As the Deputy will be aware, the Government decided in 1983 that the payment of disturbance compensation in public sector employments should be discontinued for moves on or after 1 January 1984. This decision was taken following concern at disturbance payments being made to public servants who were being relocated to better premises and often moving short distances. Therefore, compensation payments for staff moving from Abbotstown to Backweston do not arise.

I am informed by the State Chemist that all laboratory staff are co-operating fully in the preparations for the relocation, which will take place in stages between May and July. The project team will have the new location and equipment ready for each of the nine sections of the laboratory which will then move in turn, keeping disruption of testing and other laboratory procedures to a minimum. Particular care will be taken in this regard in the case of the toxicology section which handles reports for the coroners.

I am conscious of the importance of the service provided to the coroners by the State Laboratory and the impact it inevitably has on relatives of people whose deaths are the subject of inquests at a time of great distress. I know the management of the laboratory share that sensitivity and constantly monitor the service by reviewing available resources, out-sourcing possibilities and the complexity of analyses.

Additional resources have been allocated to the toxicology section and there has been a substantial increase in the number of analyses completed. However, there is still a backlog of cases due to an increase of 50% in the past two years in the number of cases referred, and a general increase in the complexity of the analyses required.

A range of measures are being taken at present to reduce the turnaround time of samples sent to the laboratory and processed by its toxicology section. Additional priority is to be given to coroners' cases over other work of the section.

Laboratory management is also reviewing the procedures and processes in the toxicology area with a view to automating as much as possible.

The possibilities of reducing the complexity of testing were discussed between the State Laboratory and the coroners and their representatives, as doing so would have an immediate impact on turnaround times. However, it was not considered possible to reduce the complexity of tests performed by the laboratory in view of the constant demand from families for comprehensive analysis, the increasing complexity of the cocktail of drugs potentially taken by victims which requires sequential analyses to be carried out and the coroners' requirement for quality analytical data, which will withstand scrutiny in a court.

I am told by the management of the laboratory that the completion of the relocation to Backweston will enable the enhancement of the quality of service provided to all its clients, including the coroners' service.

When did the move to Backweston begin and how long will it be before civil servants occupy the new facilities?

I understand from the Minister's reply that no industrial relations problems remain in regard to the movement of civil servants from Abbotstown to Backweston. Have the civil servants and unions concerned agreed to move to Backweston without any further need for negotiation or dispute?

On a previous occasion the Minister said special measures had been taken to speed up the turnaround times of tests. I recently read reports of a coroner's inquest in the Minister's constituency in Kildare. Delays in such cases cause additional grief to relatives of deceased persons, some of whom have to wait for more than a year for results. Not alone have their relatives died in distressing circumstances, but the grief of families is compounded by the fact that they are unable to complete the coroner's court procedures. This is a cause of great distress, particularly where young people have died and parents have to wait for up to a year for tests to be carried out.

I am interested in hearing the total length of time required to develop and complete the facilities at Backweston. Will the Minister confirm that there are no further industrial relations procedures to be negotiated?

The State Laboratory buildings are due for completion around the beginning of May 2004 with the agricultural laboratories due for completion in January 2005. A total of 109 staff will transfer to the State Laboratory.

When did the project start?

Building started in April 2002.

Was it not announced much earlier?

A decision was made on the relocation of the State and agricultural laboratories about a month after we announced the closing of Abbotstown for the stadium.

Can the Minister refresh my memory? What was that date?

I cannot remember the date of the Abbotstown decision. The project went to tender and was put in train by the Office of Public Works. I have reason to remember when the work started because I kindly turned the first sod in 2002.

The Minister is never shy when it comes to turning sods.

The buildings are going ahead and the State Laboratory building is due for completion around the start of May this year and the agricultural laboratories in January 2005. My colleague, Deputy Parlon, informs me that it is on schedule and within budget. I understand the transfer of staff and business from the State Laboratory will take place in the period from May to July.

Deputy Burton also inquired about industrial relations matters and compensation payments.

I asked if all industrial relations matters were resolved.

I have been informed that all staff are co-operating with the preparatory arrangements for Backweston. They are actively participating in various logistical and equipment sub-committees under the partnership process. Staff have not indicated disagreement with their transfer, but have made a claim for compensation which is being considered under conciliation and arbitration procedures.

The Minister said he had ruled out compensation.

Although a claim has been lodged, they will not get it.

Civil servants make claims all the time. Such claims are considered by means of a conciliation and arbitration procedure. A Government, which comprised Fine Gael and the Labour Party, decided in 1983 that disturbance payments should no longer be made.

For the information of the Deputy, a survey was conducted by staff which indicated an average extra journey distance of 3.25 miles and an average extra journey time of 15 minutes. This is not something which justifies the payment of compensation. The information came to light from a survey conducted by the staff involved in the move. Deputy Richard Bruton and I had to walk further to go to school.

Deputy Burton also asked an important question on coroners' cases. I am concerned by the distress caused to families by delays. The reason for it is the increased demand by coroners for toxicology reports and the increased complexity of the tests required. These factors have combined to negate the effect of the additional staffing resource allocation of 29% secured over the period 2000 to 2004. The annual figures for samples received from coroners indicate a steep rise in the demand for this service, namely a 50% rise since 2001. I will not go through all the figures, but the sample numbers received in 1999 was 1,395, in 2000 it was 1,570, in 2001 it was 1,730, in 2002 it was 2,275 and in 2003 it was 2,590. More importantly, the complexity of the tests required has also increased, so despite additional resources and a large increase in the number of tests carried out, the backlog has remained.

Some recent changes have been made to alleviate the situation. Professor Denis Cusack is the coroner for County Kildare. He is also the head of the Medical Bureau of Road Safety. In the past month or so, arrangements have been made to terminate the laboratory's involvement in a pilot project on drug abuse for drivers which was being carried out by the Medical Bureau of Road Safety. Project samples accounted for 10% of samples handled by the laboratory's toxicology section and were the most time consuming samples it handled. When samples from this project, which ended last month, have worked through the system, there should be a positive effect on the backlog of samples for the coroners' service.

My question is on the same subject. I am sure the Minister has also had constituency cases on this matter. It is extraordinarily difficult to explain to people how it can take six or nine months to get a toxicology report. They then discover that the doctor who originally admitted them has moved on and there is another long delay to obtain the pathologist's report. Can the Minister get the State Laboratory to look at international best practice in speeding up the handling of imminent inquests? It is unacceptable to leave families without access to life insurance policies and many other services for such a long time. There must be a way to conduct tests in less than six to nine months if this problem is addressed with fresh ideas. I am heartened to hear the Minister state that some changes are being made that will shorten the delay. However, we need to look at best practice and streamline the priorities going through the office.

Apart from the change to which I referred in reply to Deputy Burton, there are other changes which have been carried out by the State Laboratory. First, the current processing of tests is being reviewed in order to make the test procedure more streamlined; that is to minimise the number of staff engaged in checking the results of tests. That is called a business process re-engineering. Second, a new laboratory information management system has been installed with laboratory instrumentation connected. This will improve workflow and the turnaround time for tests. Third, there has been a change regarding the involvement of the laboratory in the pilot project on drug abuse for drivers. This is being carried out by the Medical Bureau of Road Safety. I agree with Deputy Richard Bruton that this is a matter of some concern and a number of representations have been made to me from my own constituency and from people around the country who have written to me personally about the delays. The changes that have been made will hopefully expedite the processing of these tests. There has been a dramatic increase in the number and complexity of tests. Despite a 29% increase in staff there has still been a delay. The changes to which I referred should help matters. I will certainly keep it under review.

Prior to the announcement to move the State Laboratory from Abbottstown, there was still a considerable amount of scientific investigation that had to be outsourced outside the jurisdiction. Will the move facilitate the transfer of all such scientific investigation to the new facilities? Has the Department of Finance any costing on the investigations that had to be outsourced during the course of the move from Abbottstown to Backweston?

Irrespective of the decision on Abbottstown, the Department was going to have to spend a lot of money on its laboratories. There was a programme which had already started at that time. In moving to Backweston the new location is not far from Abbottstown.

It is just across the river.

That is correct and it will be easier for most people to get there, with deference to the Deputy's constituency. These will be state-of-the-art facilities with standards comparable to the best laboratory facilities in the European Union and the United States. They will be capable of achieving international acceptance and accreditation. It will meet the requirements of European Union directives and will adhere to fire safety codes, health and safety and building regulations, and it will also provide specialist containment facilities. We should be in a position to carry out all tests in the newly constructed laboratories in Abbottstown. Between the completion of the State Laboratory in 2004 and the agricultural laboratories in 2005, Ireland will have first-class facilities.

Does the Minister have any figures on the outsourcing?

I do not have those figures but I can obtain them.

Does the Minister agree that it would be a great help to the families involved in the tragedies where tests are required, if there was more published information available? Would it not help if the Minister or some other appropriate official established a working group to set out the procedures on coroners' courts from the families point of view? In some deaths the toxicology reports are formally necessary but are not absolutely necessary because the person involved is unlikely to have been using a drug. However, all sorts of family issues from property to life insurance policies are delayed. Would it be possible to set up some kind of service for the families involved, as has been done with regard to Victim Support and crime? Very often the families are left on their own to phone the coroner's court. The Minister spoke about personally receiving representations on the matter. There is very little information available and I am sure that like myself, the Minister has had to contact coroners' offices. It is an area where I think something could be done, through provision of information and support, to assist an already bereaved family. Would the Minister be agreeable to doing that?

I would like to see how everything turns out when the changes to which I referred are carried out. When the new laboratories are up and running and have had a few months to get their affairs in order, I will keep these matters under review. I do not have any principled objection to the matter to which the Deputy refers, but I am not too sure how it would help the victims. Perhaps the knowledge would help, but I think that people are so traumatised by the death of a close relative that I am not too sure whether that would help. It is my intention that as a result of the improved facilities, these tests will be carried out more expeditiously. I am willing to keep it under consideration.

Tax Code.

Brian O'Shea

Question:

11 Mr. O’Shea asked the Minister for Finance the progress that has been made by the Revenue Commissioners in their discussions with the Portuguese authorities with a view to closing off a tax loophole which allows those who sell off assets here to avoid tax by taking up residence in countries such as Portugal; and if he will make a statement on the matter. [8936/04]

In response to earlier parliamentary questions on this matter I stated that a first round of negotiations between the authorities in Portugal and the Revenue Commissioners for a protocol to amend certain provisions of the Ireland/Portugal double taxation convention was held in Lisbon in May 2003. I am informed by the Revenue Commissioners that although a further round of negotiations was scheduled to take place earlier this month the negotiations have had to be deferred until the week commencing 19 April 2004 as the Portuguese delegation was not available to travel to Dublin on the original dates. It is not possible at this stage of the negotiations to comment further on their likely outcome.

As I also mentioned in my previous replies to questions on this matter, section 69 of the Finance Act 2003 amended Irish domestic law to impose a charge to capital gains tax on an individual in respect of a deemed disposal of certain assets on the last day of the last year of assessment for which the individual is taxable in the State, prior to becoming taxable elsewhere, where the individual disposes of these assets while resident outside the State and returns to the State within five years. I announced this anti-avoidance measure in my 2003 budget on 4 December 2002 with effect from that date.

It is now high time for the Minister not only to review specific arrangements with countries like Portugal, but to review the regulations on non-residency. We have a situation where a prominent individual who went to live outside of Ireland for a number of years was put in a position where he was able to save millions of pounds in tax avoidance by acquiring Portuguese residency for a period of time. He then returned home to live in Ireland. It is a continuing scandal to compliant PAYE taxpayers that these individuals can live offshore and be non-resident, claiming residency in countries like Portugal, yet can still stay here for 183 nights a year. They can also stay here until midnight and leave just like Cinderella, especially if they have a private jet. They are at every race meeting and social function in the country. Would the Minister agree it is time to review the scandal of non-residency for these wealthy tax exiles who continue to live in Ireland for large parts of the year? Is the Minister not disappointed at the slow pace of progress with the Portuguese authorities?

I made a significant change in this area in the Finance Act 2003. On budget day, 4 December 2002, I announced a major change in this area. This is an anti-avoidance measure which I outlined to the Deputy in my reply.

We have double taxation agreements with 42 countries and a further eight are in the pipeline. The difficulty with Portugal relates to double non-taxation. At the time the Portuguese authorities did not have capital gains tax on certain transactions while most other countries do. I do not wish to comment on individual taxpayers. An individual has a right to live in any country he or she wishes, especially in the European Union. The changes made in December 2002 will ensure the Irish authorities get their fair share of euro.

On Committee Stage and other Stages, the Deputy raised the question of residency. I pointed out to her on previous occasions that the Fianna Fáil-Labour Government of 1994 made substantial changes to the residency rules. These changes took place following considerable negotiations between the partners in Government at the time. Prior to the Finance Act 1994, residency rules were very complicated and included a mixture of revenue and administrative practice and some legislative arrangements. The changes that took place are probably more severe than in any other EU country. I have no plans to review our residency laws.

EU Presidency.

Pat Rabbitte

Question:

12 Mr. Rabbitte asked the Minister for Finance if he will make a statement on preparations for the planned meeting of EU Finance Ministers at Punchestown racecourse in April 2004; and if he will make a statement on the matter. [8943/04]

I look forward to chairing the informal meeting of the Council of Economics and Finance Ministers of the EU, ECOFIN, on 2 to 4 April, in Punchestown, Country Kildare. This meeting will be among the largest and most important to take place in Ireland over the period of the Presidency. It will be attended by some 300 delegates and up to 400 media personnel. The national delegations from the 25 member states of the enlarged EU will be led by Ministers for Finance and central bank governors in each case. The attendance will also include a number of Commissioners, among them President Prodi, and other distinguished representatives of EU institutions, including Mr Jean-Claude Trichet, President of the European Central Bank.

Preparations for the meeting are well in hand. Delegates will be accommodated in a single location — the Citywest Golf Resort Hotel in Saggart, County Dublin. The meetings of 2 April of the Eurogroup and of 3 April of ECOFIN will be held in the event centre in Punchestown, which will be specially adapted for the purpose. The large media attendance will be accommodated in a number of local hotels and will cover the meetings from the Punchestown racecourse facilities close to the event centre. The main hospitality arising will be a dinner for all delegates which I will host in the K Club, Straffan, County Kildare, on 2 April and a dinner similarly for all delegates that the Governor of the Central Bank, Mr. John Hurley, will host in the Royal Hospital, Kilmainham, Dublin, on 3 April.

There are many other detailed aspects to organising a meeting of this size and importance. A dedicated team in my Department has been arranging these logistical aspects for some time. I am satisfied the meeting will be successful both at an organisational level and at the level of moving forward with the demanding policy agenda that the Presidency and ECOFIN agreed for the six month period of the Presidency.

Will the Minister agree that a charge of €83,400 for the public relations services of the consultancy company is an extraordinarily high charge in the context of the small amount of work which must be carried out? The Minister has hundreds of civil servants working in his Department, many of whom are extremely able. Given that he saw fit to cut so stringently the budget for social welfare recipients, I do not understand how he can afford to spend almost €84,000 on one day's consultancy work in respect of the meeting in Punchestown. Has enough public money not been spent already on Punchestown? I am sure the money spent on it is already a byword among European Finance Ministers.

Will one of the subjects for discussion be the proposal by the French Government to go for harmonised corporate taxes under the enhanced co-operation measure? I would like to hear the Minister's comments on the potential impact on Ireland of such a harmonisation move.

In response to a previous question, the Minister stated the total cost of the event would be in the region of €250,000. Is that still the case and will any of it result in capital fixtures and fittings being left behind in Punchestown racecourse after the meeting has ended?

I will deal with the overall cost of the event in Punchestown. It is estimated that the direct Exchequer cost of the event will be in the order of €500,000. This is net of a contribution towards the cost to the Central Bank and the Financial Services Regulatory Authority of Ireland, reflecting the participation of the central bank governors at the meeting. The Central Bank will issue a special collectors' coin in connection with the event and the enlargement of 1 May. Profits from the coin is expected to be in the region of €1 million.

Deputy Richard Bruton has tabled a question on enhanced co-operation in the taxation area. This will be discussed at the ECOFIN meeting. The Deputy will be aware that enhanced co-operation is allowed under the treaties and was copper-fastened in the Nice treaty. However, a considerable number of processes must be gone through before a number of countries can go down the enhanced co-operation route. This poses no threat to Ireland's corporation tax rate because I do not anticipate they will decrease to Ireland's rate. I do not think there is much to fear in this regard. There are issues in regard to a consolidated tax base which the Commission has put forward. In reply to Deputy Burton, all civil servants in my Department are very able.

Written answers follow Adjournment Debate.

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