Amendment No. 1 is in the name of Deputy Rabbitte. Amendment No. 56 is related to amendment No. 1 and it is proposed to take those amendments together, by agreement.

I move amendment No. 1:

1. In page 3, paragraph (a), lines 21 and 22, to delete the definition of "Chief Special Collector" and substitute the following:

"‘Chief Special Collector' means an officer or employee of the Revenue Commissioners appointed under section 7(3);".

I wish to make a point in relation to the timescale for this Bill. Originally, Second Stage of this Bill was to be taken today with the Committee and remaining Stages being taken on Wednesday. That was considered to be insufficient time. We then agreed to take Committee Stage today and tomorrow and to extend the time available for Report Stage. The Bill also has to go through all Stages in the Seanad. It will then go back to the Dáil by Friday next.

The purpose of the amendment is to require that the Chief Special Collector be a direct employee of the Office of the Revenue Commissioners. It relates to my amendment No. 56 which requires that a ‘special collector' be defined as "any Inspector of Taxes designated by the Revenue Commissioners under the terms of this act". This is an important amendment and the Minister' response to it will determine much about the tone of this committee.

One can take two approaches to a Bill that is as outrageous as this. We can seek to continue our usual constructive opposition to the Government or we can seek to adopt a Fianna Fáil style Opposition. I was asked last night when I was drafting these amendments to imagine what it would be like if the boot was on the other foot. Can you imagine what it would be like if the Opposition spokespersons were trying to defend this measure against a Fianna Fáil onslaught? There would be very little concession given to the niceties of procedure or anything else. One can do that or else adopt a constructive approach.

This is a constructive amendment and the response to it will indicate whether the Minister is intent on delivering this Bill in approximately the same form as we have received it. As some of the Ministers backbenchers said, especially the splendid speech from Deputy Hugh Byrne, it is outrageous legislation and it is not something that we, even at this late stage, should easily contemplate passing.

Why do I recommend that it be an official from the Office of the Revenue Commissioners who should fill the post of Chief Special Collector and, obviously by extention, the posts of special collectors and then define that in amendment No. 56 by requiring that it be an Inspector of Taxes? I can explain that very easily. First, I want to dispose of a rumour. The Minister gave me a personal undertaking on it and I am prepared to accept that. It was rumoured that there was an attempt to contract this outside of the Revenue Commissioners and a number of options were discussed. That is not the intention.

Second, from whence will be drawn this Chief Special Collector and special collectors? Will they be drawn, for example, from the Office of the Comptroller and Auditor General? Only a tax inspector has the skills required to probe behind this outrageous system of self-declaration, self-assessment and self-regulation. The staff contemplated here would not have any such skills. This is the jobs of tax inspectors. They are the only ones who can study accounts and examine the validity of statements made. The problem is that, as we stand, there are no accounts. All that is required is that the person seeking protection under this Bill makes a statement asserting that he is seeking the protection of the Bill for an amount of money and testifies that it does not come from criminal sources. There is no other requirement. It is the most fantastic provision.

If somebody who by definition has broken the law — maybe he has only broken the tax laws but I think that is important even if he has broken no other law — and lied to the Revenue Commissioners, makes a statement, we are asked to accept that his statement is true.

I am extremely grateful for a communication from the Revenue Commissioners this morning on behalf of a PAYE constituent who was pursued with undue diligence in terms of putting his affairs in order even though they were in order. We hear many complaints from Deputies representing owners of small businesses about the vigilant manner in which the Revenue Commissioners pursue them. The fact that they make income returns is not automatically acceptable. If they are accepted for audit, their affairs are gone through in such detail that the pips squeak. Yet we are talking here about people who have, by definition, evaded and broke the tax laws and we are asked to automatically accept their statement.

A litmus test of the Minister's approach will be whether he is prepared to give a clear undertaking here that the people responsible for administering this amnesty will be employees of the Revenue Commissioners and that they will be tax inspectors by definition. Only tax inspectors have the skills to assess the validity of these statements. It is a critical litmus test.

I would have assumed that someone who is a special collector was an officer or an employee of the Revenue Commissioners. I do not see any difficulty with it. It never struck me that it would be contracted out. I would be opposed to that.

On the definition in section 7, and the whole concept of confidentiality, does this not put the special collector in an impossible position if that official is subsequently promoted or transferred to the position of tax inspector? It would be impossible for them not to recollect declarations made by people. The period of this amnesty is up to the end of this year. If in three or four years time an official is transferred and is dealing with the tax affairs of a person who made a declaration under this Bill, surely it is impossible and unreasonable to expect them not to recollect it? Therefore, the provision of confidentiality, given that it will be the staff of the Revenue Commissioners, is unworkable.

I will hold my fire, as it were, for a later stage about the nature of the declaration — which is quite outrageous as Deputy Rabbitte said. On this matter, my understanding is that the special collectors will be employees of the Revenue Commissioners and, presumably, inspectors of taxes or people of a higher rank in that service. Although this relates expressly to the chief special collector, I would like to be assured that everyone who is doing the ordinary business and function of supervising and policing this would be a revenue specialist. The corollary being put forward expressly by Deputy Rabbitte, that the person in charge of this should also be in Revenue, is a useful addition. If my understanding of section 7 is correct, that the special collectors will be Revenue officials, they should be able to talk the same language, come from the same background and have the same understanding as the person heading up a unit rather than someone who sees himself as having a separate mandate to try to maximise the worth of the dodger's charter. We had a question and answer session earlier at the official briefing about the interesting phrase, "protecting the revenue". This has scant regard for the protection of the revenue base of the State and that is why it is so unprincipled and scandalous as legislation, but, so far as it has any worth or function, we should ensure that the people who will be policing it have the view that, subject to the law, appalling as it may be, they will protect the revenue base of the State. That is why officials from the Revenue Commissioners are ideally placed to do this job. I support the amendment.

I wish to refer to Deputy Rabbitte's question. The "special collector" means an officer or employee of the Revenue Commissioners. I refer Deputy Rabbitte to the last paragraph of section 7 (1) which states:

"special collector" means any officer or employee of the Revenue Commissioners who—

(a) has been nominated by the Revenue Commissioners to discharge a special collection function, and has not had his nomination revoked, and

(b) has made and subscribed the declaration of confidentiality.

The subsection goes on to outline the detail. Until the Bill is passed no individual will be chosen to undertake that but I know that in some conversations during the week reference was made to a senior Revenue person and the Deputy Accountant General of the Revenue Commissioners was mentioned. No decision has been made yet but it will be a senior Revenue official. Deputy Cox asked me to confirm this. There were rumours about contracting out. None of this work will be contracted out; the work will be undertaken by Revenue staff. Deputy Yates asked me to explain what the position will be if other staff are involved.

My point was that looking at section 7 these officials could be going up the promotion ladder and might be in another job in the Revenue Commissioners in a couple of years' time. They will be doing this job only for a limited period. How can they fail to recollect? How can they be confidential only unto themselves if they know, for example, that publican "X" in a district in the midlands made a declaration for £2,000 of undeclared earnings? Looking through the books, such officials cannot but recall it. How can the Minister implement that provision?

The function of the special collection unit is to collect money. It is outlined in the legislation, that on subsequent audits and examinations, and whatever thereafter, that work will be followed on by the different investigation units over time, and they are extremely successful in their job. Maybe they are too successful in their job; that is the usual complaint I receive. The special collectors are not entitled to use information acquired in the course of their work in the special collection unit; that remains a permanent commitment. But in audit inspections people will trail things in the normal course of their duties. I see no difficulty with that. It happens on a daily basis that inspectors of taxes see issues that do not match and ask questions. When they follow other trails they will examine these issues. However, they cannot use what they have learned from the special collection unit.

Will the Minister clarify a point I consider very important? I oppose section 7. For the moment I will turn the argument round and say that I want to avail of section 2. In my dealings with a special collector I tell that official all in my declaration in order to get my certificate from the Chief Special Collector to protect me from any future anxieties.

This special collector, being an employee of the Revenue Commissioners, in the ordinary course of his or her career may go back into the mainstream of the Revenue staff and, perhaps, join the audit branch. In three years' time I may meet him doing my audit. That is the person to whom I made this confession in confidence some years earlier. Is the Minister saying that I am going to believe five years later that the person I told all to is going to behave like the Trappist monk of section 7 and is not going to say, "I now have my Revenue hat on and I know a thing or two about you; I am not breaching confidentiality because I am not telling anyone else but I am telling myself."? That official is not going to declare himself as breaching confidentially and is not going to fine himself £500 but that person could end up having heard everything about pre-1991 doing an audit post 1993. Is that not the "catch 22" about this? How can someone expect confidentiality if the person to whom you confess all of your tax sins could be knocking on your door as an auditor in a year's time?

Being realistic, is it not highly unlikely that the senior collector is going to be reduced in rank to going out on audits? The Deputy is talking hypothetical nonsense when he is talking about a senior person going out on audits. If a person brings in money will it not be reflected in the following year's accounts where his capital is going to increase? If the inspector looks at this and sees an increase in capital he will inquire where this increase came from. It is either going to come from Deputy Yates' booking office or there will be a certificate showing that it is a legal increase that is not liable for audit.

I have no problem with a future tax inspector doing his business based on the books even if he has to do a further investigation. Indeed, his past experience should make him more vigilant. I do not see what the problem is.


I have no problem with that man doing his job today.

I did not interrupt Deputy Cox. This amnesty might not please some people, but many people want to avail of it. I am concerned that we should use the Bill to get the money we feel is out there. What happens in the future is a different matter and it is to be hoped the penalties then will be a disincentive. I do not understand the argument, though I can understand the Deputy's worries. I have a certain sympathy with Deputy Rabbitte's view. He wants this to be dealt with by people who are already in the tax system as tax inspectors. The Minister clarified that.

Deputy Ferris is right. The only point of disagreement is that the Minister has not clarified it. Briefly, let me explain the situation again.

We are now discussing the definition section of the Bill. The Minister and I are approaching the Bill from different perspectives. The Minister believes he will put the Bill through without any requirement that these statements of self-declaration should be assessed or investigated. I am presuming that, when we reach that part of the Bill the Minister will be reasonable and realise that nobody could be expected to agree to a "no questions asked" amnesty. Those concerned should be required to produce some documentary evidence, in the form of accounts or other validation to show that the statements they make are true.

We have to be sure at this stage of the Bill that the person to whom the statement is made has the skills and ability to discover whether the contents of the statements are true.

The Minister disposed of the question of contracting out. The question of skills is equally important. This amendment is related to amendment No. 56 which amends the definition of the special collectors who will be reporting to the chief special collector to ensure that they will be tax inspectors. The difficulty and the difference between the Minister's perspective and mine is that the Minister is approaching this from the point of view of collecting taxes only. I am approaching if from the point of view of not only collecting taxes but also of seeking to validate the declarations by the people claiming the benefit of the amnesty, whereas the Minister is taking it as read that the declaration will be accepted and it would seem that the official receiving them would not have any of the skills to investigate further.

The Minister quoted section 7, which provides that the official must be an employee of the Revenue Commissioners and so on, as an answer to my question but it does not answer it, for the reason I have given.

Will the Office of the Comptroller and Auditor General have any role here?

There is a distinction between collecting taxes and investigating, probing and validating statements. Only the tax inspectors can do that job effectively, they do it for the rest of the tax compliant citizens. No doubt the person appointed will be chosen for his probity, if he were not, there would be enormous potential for him to make a few pounds for himself. However, he will just take the statements and give out certificates.

Deputy Michael Ahern knows the nitty gritty of doing tax returns and that what he described will not happen because if a person who benefits from the amnesty is asked, in relation to a subsequent tax year, how he accounts a discrepancy in his returns of income, he can produce a certificate stating that he may not be investigated in regard to anything after 5 April 1991. That is the problem. It is almost unbelieveable.

It beats me that the media can justify covering hare coursing and homo-sexuality while doing no analysis of this Bill or explaining it to the public. It certainly raises questions about wheels within wheels, or perhaps it is just laziness. Whatever it is, it is outrageous.

I agree with the substance of Deputy Rabbitte's remarks. The question of thorough checking arises under amendments Nos. 12, 13, 15, 19, 24, 36 and 37. I will raise it when we reach those amendments but the definition section of the Bill is not the place to do so. I am not having a political row about it, there is an issue to be raised on it.

I agree with the point made by Deputy Ferris in relation to Revenue officials using their full powers. Someone who is a dodger and who will be accommodated by this legislation will toss a coin and make the decision on whether to tell all or hold back. Offering confidentiality is the softly softly catchy monkey approach. Could it happen, even in a small number of cases, that someone who has told all to a special collector, as defined in section 7, could meet the same official subsequently in respect of future accounts? Would they not wonder what confidentiality was all about? Might they not hang back and feel that, as they have been living outside the law, they will stay outside the law because the offer of confidence might appear to be a confidence trick. I hold no brief for the dodger. That is why I do not go along with this legislation.

I understand Deputy Rabbitte's fears in relation to this matter. I anticipate that Revenue will be looking for, as a minimum, a statement of affairs to ascertain the capital worth of the person applying for the amnesty at the initial opening date. I do not see how it would function otherwise. An opening statement of affairs would include any undisclosed sums and there would then be a statement of affairs for each year or for a certain time period, for example, 1982 to 1985 which would reflect the increase in capital which might also reflect the undisclosed amount. Therefore, a capital account would be brought into being for that period. Otherwise there would be difficulties.

The Deputy is saying that people could just go in and declare they are £50,000 out for the last three years which would cause difficulty. A statement of affairs for those periods should be required. That would put an end to the matter and overcome most of the problems.

A number of points have been raised. They seem to range from amendments Nos. 1 to 56 and I will try to answer some of them.

In reply to Deputy Rabbitte's question, the special collector's function is to collect the money and issue the declarations. The staff of that office will not be carrying out investigations, following through, doing audits or any kind of examinations. The special collection unit will accept the money and issue the declarations and will not enter into any kind of examination. I want to make that absolutely clear.

While the staff has not yet been picked in this unit, it is unlikely to be comprised of staff who would, subsequently be posted to audit sections. That is why I said that somebody like the Deputy Accountant General — a senior person who would not be likely to go out on the road afterwards to do audits. Even if they did, they would be permanently sworn to secrecy. That will not prevent them from doing their job. I cannot see a position where the investigative staff in Revenue would have been doing this kind of collection work but nobody can presuppose that someone cannot be promoted, change sections or go into a different post, which could well happen. While they are bound to secrecy under the amnesty even if they are in a different section in five years' time, they will also be bound to do their job so they will have to follow through in the normal way.

If somebody comes into the special unit and declares that he or she has undisclosed liabilities up to April 1991 of £100,000, in due course, before 14 January, he or she will pay the required £15,000. There is an obligation on them to fill in a tax form for 1992-93 and for 1991-92, depending on whether they were already in the tax net. If they amend it, and we presume they will, they will certainly fill in a form for 1992-93. That will not protect them later on if the Revenue Commissioners find some glaring error. We are talking about a person who is non-compliant and who may be outside the tax net, perhaps somebody who is working on 50 per cent or 60 per cent of their figures and they fill in a form for 1992-93.

This amnesty will only benefit those who decide to pay their legitimate tax in future. They are getting an opportunity to settle their affairs, fill out a 1991-92 tax returns form, if they have not already done and a 1992-93 form. If they declare a sum out of kilter with the 1992-93 form, any junior tax inspector will realise immediately that they have used the amnesty. They will check if that is so and ask for the certificate. They cannot get any other information from the Chief Collector's office other than the sum. It will be clear to them whether the person's disclosure is in line with the certificate. If it is, that will be the end of it but if not they will go to the appeals officer and say that although this person claims an undisclosed amount of £100,000, based on the figures they think the person has an undisclosed amount of £500,000. In such a case the amnesty does not apply and these people are brought into the system. If a person who avails of the amnesty is shown at any time in the future not to have made a full disclosure he will lose the benefits of the amnesty and leave himself open to the full tax charge as well as the interest and penalties. In addition, he may incur a prison sentence of eight years. A person will be accepted at face value in the Chief Collector's office but if there is evidence that the taxpayer has not made a full declaration there will be an audit and the benefits of the amnesty will not apply.

The point was made yesterday that a person could move money out of the country but Deputies should remember that those records are also held for ten years. The Revenue can apply to the High Court and go back on accounts for ten years.

I was asked about the Comptroller and Auditor General. In relation to the work of the chief special collector, the Comptroller and Auditor General will carry out his normal constitutional statutory functions including reporting to the Dáil. Paragraph (4) (c) states:

. . . . provides to the Comptroller and Auditor General or the Accounting Officer of the Revenue Commissioners such information as the Comptroller and Auditor General or the Accounting Officer, as the case may be, may request and reasonably require to ensure that any special collection function has been discharged in accordance with this Act.

The function of the office is to accept the declarations and remittances and to issue the amnesty certificates in relation to tax, the great bulk of which we would not get otherwise. If the collector were the investigator there would be no point in an amnesty. Many people in this country with undisclosed and undeclared amounts of money from suppressed income would have no interest in the amnesty.

I have received queries from many Deputies in relation to the amnesty, many of which related to business people with small amounts of money. Twenty-three Deputies were in touch with my office this morning between 9 a.m. and 10.30 a.m. Their queries were in relation to people with sums of the order of £5,000 to £55,000 as were most of the postal queries. Unfortunately I have not yet come across a case where a person is declaring money held abroad.

The point has not been disposed of. Unfortunately, the amendment is grouped with amendment No. 56 and it will be too late to clarify this point later.

Anybody who has lived in this country knows that what the Minister said is probably true and that there is suppression of income on a wide scale. That says a lot about the tax system or perhaps about or political culture. We did not get £500 million in 1988 and we will not get £300 million now from small men. It is the big guys in whom I am interested.

The flaw in what the Minister said is that there is no assessment of what they put on the original statement when they own up. Deputy Penrose seems to be under the impression that is the case but it is not. The Minister admitted — and this is a further step along the line — that when you go into the collector he takes you at face value, to use the Minister's phrase, and of course there will be no questions asked. The Minister says that if there is a glaring error this will be discovered and they will lose the benefit of the amnesty. How do you know there is a glaring error?

People who have the best tax advice available to them and who have managed to come up with ingenious ruses to avoid and evade taxation in the first place are not the kind of people who will present something as obvious as a hole in a ladder. They will not do it that way. Since no one will look behind the original statement and since there is nobody with the skills to assess and investigate it, we cannot rely on the manner in which it is constructed. It will be deliberately constructed so that they can buy a certificate. It is like being accused of drunk driving and being able to reach into your pocket and produce a certificate for the garda which says: "I may well be drunk but there is my certificate and that prevents you from bringing me to the station or taking a blood sample." They are prepared to pay money. They are prepared to say that they are bringing back £100,000 and to pay £15,000 to get the certificate. It is of immense value. They will construct their 1991-92 income returns consistent with that statement so that the average tax inspector would have no reason to suspect anything. Unless the man is a fool he will not be caught, that is the basic flaw in this.

The certificate is of no value unless it is a full, true statement.

A person could be telling a pack of lies, I accept that but it is untrue to say that there is not a follow up. There could be an investigation into the 1992-93 return, the 1991-92 return or any subsequent return or it could arise in an audit. The statement give a person 30 days' grace. It must be a full and true statement and a full and true disclosure of liability, otherwise they will be open to the full rigours of the system.

I agree with the logic behind Deputy Rabbitte's proposition. The certificate is almost like a certificate of immunity I take the point the Minister makes which is theoretically fine, that if a person gets a certificate and does not tell the truth, the system could come down on them like a ton of bricks but what does the system know about a person? The Minister's soft sell on this is that a person cheated the taxman up to the eyeballs up to 5 April 1991 and then, by some kind of Pauline conversion, from being a profound cheat not only does the person declare everything in the special confessor's office and get a certificate of immunity but, as a reformed person, then fills out a true, accurate and full statement of affairs for the first relevant tax year. Even the most junior tax officer would know that the person had benefited from the amnesty.

The biggest beneficiaries will be those with the best advice available to them. I refuse to accept that such people will make a tax declaration for the year 1992-93 which would enable the most junior officer to realise that something was wrong and to set an audit in train. It is arrant nonsense to suggest that. These people, under current law, have evaded taxation and we are asked to believe that after they get their immunity certificate, the Minister's most junior Revenue official will see through them. The Minister cannot believe that, if he did we would require an explanation of how these swindlers managed to dodge the system for years as they have done. Many of them did so through avoidance and tax engineering schemes. They were brilliantly advised and always ran right up to the margins of what the law would allow. We are asked to believe that such people cannot work out how to devise a system that will fool the most junior Revenue official. If the Revenue Commissioners try to investigate them they will produce their immunity certificate. They will be well advised. Unprincipled and unethical people will exploit the amnesty to the maximum. For example, if a substantial player in this cheating field has the equivalent of £1 million held abroad in a set of separate accounts and takes out an immunity certificate for several of the accounts — not for all — unless the Revenue has evidence of more accounts than the number declared, it will not have access to them. The Minister is undermining the integrity of the tax system to get this once-off revenue bonanza for next year's budget.

I do not accept that the most junior person in Revenue will be able to see through this because the most blatant cheats in the system, with the best and most expensive advice available to them, will play this to the maximum to suit themselves. They have already proved this by being outside the system. They know how to play the game. Now they have a new game, the best one in town; how to buy an immunity certificate as cheaply as possible. They will engineer the declarable certificates to fit in with their immunity certificates. They will have cheap retrospective immunity from any substantial investigation into their affairs up to 5 April 1991.

I do not think the Minister read the Bill very carefully. He gave the clear impression that if someone did not declare their total earnings they would be caught out on the basis of their current earnings. In other words, if you declared a small amount in the amnesty and you were showing fairly big earnings in 1992-93 you would be caught out.

I would like to draw the Minister's attention to section 5 of the Bill. This is where one produces the black certificate. It does not say that after 30 days you produce the black certificate, you can produce it on the first day.

Section 5 states: ". . . the individual produces to the inspector or other officer, not later than 30 days from the commencement of the said enquiries . . . a certificate . . . the inspector or other officer shall . . . be precluded from continuing with or commencing the said enquiries or continuing with or commencing the said action . . ." when the tax evader gets an inkling that the Revenue is interested in his case he faxes in his black certificate before it gets a chance to investigate him.

I had discussions with people who have been involved in Revenue audits. They say they must take on the role of an auditor and reconstruct the accounts from scratch. This is like asking the Revenue Commissioners, when the black certificate is produced, to act blindfolded in the dark, with the Appeal Commissioners to put a case together. It just cannot be done. They do not have access to any of the data, bank accounts, accounts, audited accounts, statements, documentary evidence from third parties or invoices, because the person merely says that his business activities prior to April 1991 were different from the position today and that he got his black certificate on the understanding that he would not be pursued.

The Minister cannot change the rules and say that section 5 does not exist, this is the kernel of this Bill. It is totally out of order to discuss it now but the Minister drew my fire on this in so far as he gave, a misleading impression that a failure to make a full declaration means getting away with it. The evidence is clearly that the ceasing of the commencement of inquiries will make it impossible for the Revenue Commissioners to have a winnable case against the Appeals Commissioners. There is no such thing as 30 days' investigations and then producing the certificate; you will head them off at the pass if you are a tax evader. Therefore, what is in effect being offered here is a "no questions asked" amnesty.

I have no doubt that a substantial tax evader will head straight to the High Court and seek to overrule the Appeals Commissioners, saying his interpretation of section 5 of this Bill was on a bona fide basis, that he would not have declared under the amnesty unless he got the interpretation he sought. I hear the banks are already putting together a constitutional case in relation to section 13. There is a whole series of areas. What is "material extent"? What are "reasonable grounds" on which the Appeals Commissioners will adjudicate?

This is a legal lottery, we are now paying roulette with the law, because there is such uncertainty and because the wording is flawed and inadequate.

With all due respect to the Members, we are inclined to wander from the section with which we are dealing. It is a complex Bill and Members are entitled to as much flexibility as possible. However, we should stay as close as possible to the amendment. We have been discussing amendment No. 1 to section 1 for 55 minutes approximately and two or three speakers have intimated their intention to speak. I understand Deputy Rabbitte's position, he sees this as the main thrust of the Bill with regard to how it will operate, but I would appreciate if Members try to stay as close as they can to the various sections.

The discussion seems to be drifting from one type of approach to another, from an amnesty for tax evasion or tax avoidance to one of a tax Bill which will impose penalties on people for normal tax purposes, if you fluctuate you will get confused regarding the issue. I have no problems with most of what has been said except that you have to take a line on it. Confidentiality is a great problem. One of the purposes of this exercise would be, no matter what means are used, intended or unintentional, that information gained would benefit the Revenue Commissioners. The purpose of an amnesty is to acquire funds, information gained as a result of the amnesty will ensure that people will no longer be able to avoid the issue. Unfortunately that is the situation. This Bill may become a new form of tax Bill dealing with the legitimate tax areas rather than dealing with the illegitimate areas we are trying to address.

Let me take that last point first, because this is a complex Bill. We are not drifting from it and I am not confused. Let me take up the specific point Deputy Walsh made about the purpose of an amnesty. As he is a good trade union member, I will give him a definition from a statement from IMPACT, the public sector trade union which, inter aliarepresents the tax inspectors. The statement said that the amnesty requires that a full disclosure of all income is made to avail of the amnesty. It then avoids the provision of this clause by failing to enact a requirement that declarations under the terms of the incentive amnesty be accompanied by returns of income supported by accounts as is the case for all other self employed persons.

They say a declaration to the special collector that this is a full declaration of income is all that is required.

That is a succinct definition of what is wrong here, and we have made progress because the Minister said: "Of course a person could, in the opening statement, be telling you a pack of lies". That is true and a great many of them will tell a pack of lies but, because of that original pack of lies, it will not be possible for a tax inspector subsequently to pick up the errors. I appreciate that we are working under enormous time pressure which is unreasonable, but the legislation is unreasonable, so, therefore, I am reluctant to continue to press this. I do not know what my position is in terms of calling a vote, but this goes to the heart of the matter. I am trying to put in place people who have the skills by training and profession to find out whether these people are telling the truth. It seems to me that by allowing a situation where they can come in and tell a pack of lies, to quote the Minister, means that by definition you will not get that. It is shameful. If, for example, as the Minister concedes, in that opening statement they are required to make year by year income returns for the years for which they are seeking the protection of the amnesty and to furnish documentary evidence to support that, then I will accept that, provided he is prepared to concede that.

One point that drifts through some of the comments is that revenue audit programmes are easy and that all these people avoid them. While not many of the people who were shouting for an amnesty came to the Department of Finance or the Revenue Commissioners, the reason they were shouting is that the Revenue Commissioners are closing in, although not as quickly as anyone would like them to do, because there are a number of areas they cannot get at. They will never be able to get at these offshore accounts and at some of the more sophisticated small operators creaming off a certain amount of the income. By and large, in this country it has to be said that the major companies and the sizeable transfers of revenue are very good. I think there is an implication in some of the things said when we were talking about the big business being the people who are evading taxation. I do not believe that. However, most of the VAT and the revenue returns from major companies are on disc. Generally speaking, checks have not revealed anything. There is the ongoing audit setup of a percentage being audited and investigated and there is nothing in these. On the other side a great many small businesss are involved. Deputy Rabbitte mentioned 5,000 and I mentioned a figure of 5,000 and 75,000; it is small, but not that small. It is big evasion or avoidance, whichever way you like to put it. Fear of the audit programmes or checks ensures compliance many people availed of the amnesty in 1988, and have kept their tax affairs in order. That is why, over recent years, the revenue base here has improved, substantially and allowed us to reduce corporation and other taxes. Revenue audit programmes are sophisticated and are detecting methods of evading payment.

Deputy Rabbitte quoted me correctly in saying that people will tell lies and will not be queried at that stage. However, if they are subsequently caught they will be penalised.


If they are so clever they will not be interested in the amnesty. They will not be applying anyway. That is the major flaw in what Deputy Cox said.

They will buy the certificate.

They will not. They know the system too well, they will not bother with the amnesty. By clearing a number of the ordinary cases the Revenue Commissioners will have more time to go after these people. By and large, over the last 20 to 30 years since the sixties people have operated and managed either to comply in regard to a small amount of the business or are outside the net altogether. I personally do not know them but they must have been engaged in this practice for a long time if they have the kind of money we keep hearing about in offshore islands. In my efforts over the last year to check this in so far as it can be checked, it seems some Irish people have a huge amount of money offshore. I do not know, I will be able to say at Christmas whether they will take up this amnesty. That is the best I can do. I do not know if those people are very concerned. I know a number of people are worried they cannot spend their few hundred thousand, £50,000 or £5,000 and want to put their affairs in order. They are worried about dying, about Revenue and a number of things and they are in favour of the amnesty.

Deputy Yates asked a question on a central point. Anyone who fills in a form and omits to declare something — free fuel allowance, pension or whatever — may get away with it but faces the propect of detection. Not every form is audited and in an audit of small proportions one might escape detection.

People are saying this is a once only event. The 1988 amnesty was not once only; it raised the base. This will again raise the base if it works. People will become complying taxpayers and fill in a full form for 1992-93. A person not complying will not do so, but there is no immunity from investigation of 1992-93 returns. That is my point. If the inspector establishes substantial capital and income in 1992-93, the taxpayer will have to ensure that his declaration is correct. There is no close off date for the 1992-93 investigation by the Revenue Commissioners. They can come back to that form in three year's time, and they will, because that is how they operate.

We have all dealt with clients who have been involved in this. Their base line to avail of the 1993 amnesty will be the 1992-93 form. That is how the system operates, how investigation and audit work, and this legislation will also work.

Is Deputy Rabbitte pressing this amendment? We have now given it one hour and five minutes.

I do not want to be unreasonable but I want to press the amendment. Does that mean dividing the House?

If you wish to call a vote it will mean dividing the House. We will leave that to you to decide.

Without dividing the House, I want formally to call a vote on it because I do not want to waste valuable time.

Amendment put and declared lost.

Amendment No. 2 is in the name of Deputy Rabbitte. Amendments Nos. 4 and 5 are related. It is proposed to take amendments Nos. 2, 4 and 5 together by agreement.

I move amendment No. 2:

In page 3, paragraph (a), between lines 32 and 33, to insert the following definition:

"‘individual', other than an individual who was a beneficiary of section 72 of the Finance Act, 1988, has the meaning assigned to it by section 2 (2);".

This group of amendments again relate to the definition section but must precede subsequent amendments which deal with a major issue. In amendment No. 2 I am seeking to preclude from the protection of the amnesty individuals who benefited from the 1988 amnesty. In amendment No. 4 I am seeking to preclude persons who benefited from the 1988 amnesty. The difference between "individuals" and "persons" may not be readily intelligible. "Individuals" are the people who qualify for what I call "Albert's amnesty" or, as called in the explanatory memorandum, the main amnesty. "Persons" include companies and this is "Bertie's amnesty" or the general amnesty. Individuals or persons who benefited from the 1988 amnesty should be expressly excluded from the protection of this amnesty. I am, of course, proposing that because I do not see why anybody would bother paying taxes if living in a tax managed society whereby there will be an amnesty, like buses, in my constituency every so often.

A Deputy

Except on Fridays.

That is right, on a couple of Fridays recently there have not been any. In regard to this, wait for a change of Government and there will be a new amnesty. We are encouraging the belief that we live in a society where there is another amnesty around the corner. That is disastrous for the integrity of the tax system and the morale of citizens who suffer a great deal in paying their lawful taxes. I do not think that any Government or Minister should allow that view to be fostered in society.

The Minister remarked during the course of the last debate that the people who availed of the 1988 amnesty were largely on record. If that is the case why should we not exclude them from this? All the information needed to pursue them is available if they have again slipped into arrears. We said on Second Stage that the 1988 amnesty, which was a different kettle of fish, applied generally anyway to people within the net. A very small number of additional persons or corporations were brought into the net as a result. Why do we have to give them the benefit of this measure?

Deputy Hugh Byrne made an extraordinary speech yesterday and Deputy Ó Cuív made an even more extraordinary speech. Watchers of politics would be very interested in it, it harks back to history and so on, but I am not really interested in some old granny in Connemara who has a few pounds in the post office which she does not declare. That is neither here nor there. I do not know what the limit is —£70 or so interest per annum. If somebody exceeds that by £5 or £10 and does not declare it, I do not wish to seem imprudent but I am not interested in it. That is not what we are talking about. We are talking about big fish here who set out to subvert the system.

Amendment No. 5 in my name seeks to preclude from both amnesties — the incentive amnesty and the general amnesty — those who availed of the 1988 amnesty — on the grounds of equity. Firstly, people who availed of the 1988 amnesty did so on the basis that the then Minister for Finance, Ray Mac-Sharry, said that it was a last chance for non-compliant taxpayers to regularise their affairs. Now it transpires it is a multiple opportunity for people to regularise their affairs without penalty.

I would like to outline a case which demonstrates how unfair this is. Someone, who was very upset, contacted my office yesterday to say they had arrears of tax which they wanted to rectify just after the 1988 amnesty, but that the time for doing so had passed. In settling they were hit with very harsh interest and penalties. I received a letter from the person which stated:

This agreement was made on foot of returns presented to the Revenue by my company and related to outstanding VAT, etc., pre 1988. The official of the Revenue was totally inflexible with regard to the matter of interest as we did not avail of the 1988 amnesty. The fact that we were not in a financial position at the time of the amnesty was of no concern to them, interest had to be paid or a judgment against the company would be sought. It has always been my opinion that the interest in question was, to say the least, harsh. The agreement was honoured but at considerable cost both financially and psychologically to me and my company.

When the new amnesty was first mooted I could not believe that any Government could support the notion that hot money be allowed back into the system. I am sending you a copy of a letter I wrote to the Revenue Commissioners expressing my feelings in the situation.

When the general amnesty was announced — i.e. the extension to the interest — my hopes were raised as it appeared to my mind that this 1993 style amnesty was in fact an extension of th 1988 amnesty. As a matter of justice all payments made to the Revenue Commissioners should be treated equally without interest or penalty.

To my horror, following a call to the Department of Finance, I was told that all agreements in place or completed would stand. We now have a situation where the ill-gotten gains of those in liquidation between 1970 and 1985 can now be repatriated at 15 per cent while those who did their best to put their affairs in order are thrown to the wolves.

It goes on to name a figure of £4,000 or £5,000 which this person had to pay. How can one explain to him how those before him got off without interest and penalties? Those coming after him, availing of this amnesty, can get a waiver of interest and penalties but because he was a sucker and paid his tax between amnesties he does not get it. This is totally inequitable.

The whole concept and basis of our tax administration and enforcement system is equity. People who have the same earnings pay the same level of tax, people who have the same levels of sales pay the same tax. Here we have a situation where competitors in business are being treated as fish and fowl. It is utterly unfair.

I also have an amendment tabled, in case a future Minister decides to have another general amnesty, that a direct debit system would be introduced for all who avail of this amnesty so that they will not again fall behind. We are dealing with people who are inveterately slow in paying, who have an arrears system built into their cash flow. If they can budget in the expectation that every couple of years they will be absolved of interest and penalties it makes the treatment of those who pay such interest and penalties savagely harsh. If a refund is not being offered in this amnesty to those who in 1988 did not avail of it, in justice, you cannot give those who did avail of it two bites of the cherry. That is patently unfair.

The amendments are perfectly reasonable in their intention as Deputy Yates outlined. He asks what you tell a taxpayer in that position. We have had several amnesties in the last couple of years, an amnesty culture, which is arbitrary, inequitable, discriminatory and invidious.

It is designed to take people with equivalent tax burdens and liabilities and treat them differently, some who behave decently and are socially responsible get a kick in the teeth and others who cheat get away with it. It is unfair, wrong and tough but that is the explanation. This whole process is unprincipled.

These amendments, in the context of the gross injustice of this Bill, are reasonable. People who have already availed of an amnesty should not be entitled to avail of others every so often.

I fully support this. When the Finance Bill, 1988 was introduced the then Minister for Finance said it was a once-off chance for people to get their affairs in order. At the time the former Deputy Barry Desmond, quite rightly, stated he was concerned because he realised that if we went down this road we would go down the road again in another three years. He was right, although it took five years.

This is different from the 1988 Finance Act because under that Act the full tax rigours applied, only interest and penalties were waived. Also, in the amnesty granted under the 1988 Act confidentially did not apply. The defaulters were known to Revenue. In this Act, we are going to extraordinary lengths to try to be secretive in relation to the defaulters and a rate of 15 per cent is to apply to personal and capital gains taxes.

I supported the 1988 Act on the basis that people who availed of the amnesty at that time —£500 million was collected — are known as Revenue. Under this Bill, given the confidentiality offered, who will zone in on this information? Will the collector of taxes establish if the same people claimed in 1988? Could they then be prevented from having a second bite at the cherry?

If people have been given a warning in 1988 and told the amnesty is a once-off event and they default again, it is wrong to give them a charter to be tax cheats. I support the proposal that a similar concession should not again be given to people who availed of the 1988 amnesty.

It is the objective of the scheme to provide those who failed to meet their tax obligations in the past a final opportunity of regularising their position in advance of the introduction of more stringent penalties. The 1988 amnesty, as Deputy Rabbitte reminded us earlier, did not bring in a large number of people from outside the net. By and large, it brought in people who had delayed paying their taxes. In general, they have remained up to date since although there are those who, for one reason or another, have not.

A further useful purpose of this measure is the economic benefit. We will bring in as much tax as we can under this system. It will be used also to try to achieve a compliant tax society and to try to secure the highest possible proportion of undisclosed liabilities for the period to April 1991. The scheme is unlikely to involve many of the people who came in under the 1988 amnesty as Revenue has been far more diligent in its systems since then and because it has more staff and is more effective.

Some undisclosed liabilities which will now come to light may apply to people who benefited from the 1988 scheme but it would not be of any great benefit to distinguish between them and those who are coming in for the first time. It would just make the operation of the system more complicated.

Deputy Yates objected to this measure on the grounds of equity. As Deputy MacSharry said in 1988, it is unfortunate that some people inevitably fall on the wrong side of the line. That always happens with legislation, which is regrettable, but one cannot legislate for every individual case. If one were to exclude those who availed of the 1988 amnesty from the provisions of the incentive scheme, it could obviously limit the proportion of undisclosed liabilities being secured, from the Exchequer point of view, and it would certainly reduce the amount of funds applied for the benefit of the economy, arising from this scheme.

The Minister has just shown his hand. He is saying quite blatantly that while many taxpayers may have been treated harshly and inconsistently, that is just tough. The Minister has shown he is like an expansive tax evader. He is saying he is just after the revenue. He wants to grab as much money from this as he possibly can, the coffers in 1994 irrespective of equity, consistency or justice. It is bad law, a long way from good tax administration and practice and has uniquely succeeded in upsetting nearly everybody in the Revenue and tax compliance business.

I very much doubt whether those who paid in 1988 still have substantial undisclosed resources given the fact that Revenue has them in the net. I have been told by Revenue that, by and large, these people have not fallen behind. Therefore, any arrears of payment by those people covered by this amnesty would probably not be very significant.

I do not think an Opposition worth its salt would confer approval on the introduction of an amnesty culture to this society. This is a fundamental point of principle. As Deputy Cox said we can not get into a cycle of amnesties.

What guarantee do people have that if they continue to pay their taxes after the 1993 amnesty, there will not be another amnesty in 1997? There is no such guarantee. This is a matter of principle.

The Minister said most of those in this category have come into the net and stayed in it but that others, "for one reason or another" did not. This is an example of the Minister's tremendous ability to negotiate round so many of us on the other side of the House for so long in various capacities. It ought not be let go on this occasion. What does he mean, "for one reason or another"? Some people came into the net or were in it already and they have kept their taxes up-to-date, or have struggled to do so since. Should they be treated differently from those who did not do so, who waited in the belief that the boys were back in power and there would be another amnesty if they just sat tight and kept the Revenue at bay for a while?

We saw the squealing in Donegal when money we never knew was in the country was produced from under mattresses. It was mentioned in the House by Deputies who spoke about the ferocious disposition of the tax inspectors concerned. There is, unfortunately, a category of people who do not believe they have any social obligations to the rest. I remember the then president of the ICMSA, ten years ago, making a point which, unconsciously, proved that. He said they had paid £32 million to the Revenue Commissioners in the previous year and that was not all it had cost the farmers, it had cost them £40 million to get tax advice on how to keep down the bill. Seán Kelly made that statement when he was president of the ICMSA. There are people who would rather pay money to tax advisers or indeed to anyone except the Revenue. We cannot approve of that.

We have seen the extraordinary lengths to which people who are revered in this society go to buy and sell a site and to cause a money trail to run across a number of different tax jurisdictions. One can take down shelf companies for a few pounds, transfer the moneys, as footballers pass a ball to avoid tax.

As an Opposition we cannot allow this to go through so I will have to press the amendment.

Ongoing compliance is not affected by the amnesty. I know that does not change the Deputy's point but ongoing compliance is followed by Revenue in the normal way. The amnesty refers to the pre 1991 period, so the Revenue's current work follows.

Amendment put.

As there are fewer than 31 Members present, it is now proposed that eight minutes be allowed to elapse prior to taking a vote.

The Select Committee divided: Tá, 7; Níl, 14.

Bradford, Paul.

Browne, John.

Cox, Pat.

Finucane, Michael.

Keogh, Helen.

Rabbitte, Pat.

Yates, Ivan.


Ahern, Bertie.

Ahern, Michael.

Ahern, Noel.

Broughan, Tommy.

Ellis, John.

Ferris, Michael.

Killeen, Tony.

McDaid, Jim.

O'Keeffe, Batt

O'Keeffe, Ned.

O'Leary, John.

Penrose, Willie.

Smith, Brendan.

Upon, Pat.

Amendment declared lost.

Amendment No. 3, in the name of Deputy Rabbitte, has been ruled out of order.

Amendment No. 4 not moved.
Question proposed: "That section 1 stand part of the Bill".

I regret that the Chair ruled my amendment on the 1 per cent levy out of order. This was an ideal opportunity to contrast the imposition of the 1 per cent levy and an ideal place from which to get the funds to refund the money. I am sure my Labour colleagues, in particular, would have supported me enthusiastically had I had the opportunity to make my case.

As the Deputy is probably aware, the amendment involved a potential charge on the Revenue.

I understand that it amounts to an increase of 1 per cent in the tax payments of tax compliant people.

Question put and agreed to.
Amendment No. 5 not moved.

Amendment No. 6 in the name of Deputy Rabbitte has been ruled out of order as it involves a potential charge on the Revenue. Amendment No. 7 is in the name of Deputy Cox. Amendment No. 78 is an alternative to amendment No. 7 and, by agreement, both may be taken together.


I move amendment No. 7:

In page 4, before section 2, to insert the following new section:

"2.— Any moneys received by the Revenue Commissioners under the Waiver of Certain Tax, Interest and Penalties Act, 1993, shall not be used for current account purposes and may only be used for the purpose of discharging the national debt or for the funding of any capital project.".

I listened carefully to the debate on the Report Stage of the Finance Bill and again to the Second Stage debate yesterday. I got the distinctly uneasy feeling with regard to the bonanza which this mother of all amnesties is going to deliver, that the Exchequer will, without any doubt whatsoever, be the beneficiary of a very substantial once for all gain by next January. My fear is that this windfall gain will lead to a bout of virtual spending incontinence in terms of the range of schemes I heard discussed.

I heard, for example, there would be more money spent on the Garda, education, schools, the health services, improving services for mental handicap, abolishing the 1 per cent levy and providing equity for Aer Lingus. There would be more money to meet public sector pay commitments and a variety of capital projects. I could make a long list. Since the revenue is a once off gain, I would like to have it clearly established in this Bill that the nature of the expenditure incurred will match the nature of the revenue, that is to say, that the expenditure itself will be once off and hence the emphasis on either using the funds to discharge the national dept or alternatively, or as well, funding capital projects. By its nature capital expenditure will not produce ongoing current expenditure although it can have side effects to that effect. I urge the Minister to accept this as a basic disipline for the tax windfall, which no doubt has been the logic behind this otherwise iniquitous amnesty.

I accept the point the Minister made earlier that if this amnesty works, it should lead to some increase in the tax base. Going on the experience of the 1988 amnesty it may not yield a lot by way of extra tax cases not already in the system. The Minister thinks many of the bigger fish who are clever at manipulating funds and keeping them outside the system probably will not use the amnesty. After all the odium which the Government had heaped upon it over the hot money amnesty it may not yield very much. I expect this is what forced the Minister into giving a 1988 style amnesty — if he was going to get the stick he wanted to get some of the benefit in revenue terms also.

The tax base may widen and if it does we will know by its effect in the fiscal year 1995 and we will know what to separate from windfall gain versus a base increase. I urge the Minister to accept the amendment so that we will not, in budgetary terms, suffer from the illusion that many Members addressing the House appear to suffer from — that we can start committing overselves to massive additional schemes of current expenditure when the money is received. It is a one off gain except for the long term increase in the tax base. We will know with clarity what that is in the subsequent fiscal year. For the balance I would urge that we either discharge the national debt or use the funds for once off capital projects.

Amendment No. 78 is the same as this one. As I said yesterday in the Dáil, the whole purpose of this amnesty is to try to shore up the increasingly desperate position the Government finds itself in for the 1994 budget.

This money has deliberately been chosen to come in on 14 January, not 14 December which would be logical to keep it in this financial year as it is this year's amnesty. This is an effort to boost our revenues to give a false presentation of the accounts in the same way as, this year, the money from the sale of Greencore and Irish Life shares was put in as if it was a receipt from VAT or income tax. It was put in as a current receipt when it was a capital once off receipt. Regarding the sale of the shares in Greencore, no matter how incompetently you do it or what mess you land yourself in you can only sell them once. You cannot repeat that each year.

It is the same with this amnesty: the money received, no matter from what source, is once off. In fact, it will probably bring forward, as happened in 1988, money that would have come through the system, either through audit or through the Collector General's Office in 1995 or beyond. This is a wrong way to underscore the public finances because it is disguising the underlying deterioration in the Exchequer borrowing requirement. Permanent commitments such as increases in public sector pay or the abolition of the 1 per cent levy have to be funded annually whereas the amnesty is only a once off measure.

The only realistic approach is to say, whatever arguments there are about windfall cash that it should go towards reducing the national debt. The national debt is well in excess of 100 per cent of GNP, 102 per cent or something in that range. The debt service costs just under £2.5 billion a year. It we were to conform to the Maastricht and European Monetary Union criteria, we must get the debt down and I believe, therefore, the best use that can be made of this money is to discharge the national debt.

We have heard the lowest of the low argument advanced particularly by members of the Labour Party, to justify this unscrupulous amnesty on the basis that the handicapped and those who require remedial education can only get the money through the loot from this amnesty. This is totally dishonest. Anybody who knows anything about the handicapped, for example, knows the capital budget is only a drop in the bucket. One could solve all the residential and day care requirements for the handicapped for £50 million but the annual current cost of salaries and staff is at least £20 or £30 million.

Given the track record of this Minister, his ability to cook the books and to pull a stroke in relation to capital and current receipts, it is very important that this committee keeps the Government on the right tracks, keeps a disciplined approach to finances and keeps it in line with its own commitments in relation to the Maastricht convergence criteria and ensures whatever windfall is received, whether it is £50 million or £1 billion, will be used to service the national debt.

The amendment makes a good point but it would be disingenuous of me to support it, having regard to the previous amendment in my name, which sought to eliminate the disgraceful 1 per cent levy imposed on all workers with a very moderate income upward. Some of the proceeds from the amnesty ought to be used to pay back those workers who were so disgracefully treated by the Government. It is prepared to pile more tax on their backs whilst at the same time cooking up an amnesty to ensure that those who did not pay any tax in the first place only have to pay a minimal amount of 15 per cent in the case of hot money.

Sitting suspended at 1 p.m. and resumed at 2 p.m.

Amendment No. 7, Deputy Rabbitte in possession.

Once it became inevitable that an amnesty was to be forced through — of course one cannot probe behind Cabinet confidentially any more than one can probe behind a declaration from a tax cheat and the Taoiseach's personal prestige was sufficiently important to make an amnesty inevitable — the Minister for Finance and his officials decided they might as well get substantial money from it. The Department of Finance and the Minister for Finance knows we will have a difficult budgetary situation next year. They set the date at 14 January, and they were going to get in a great deal of money. They have no Greencore or Irish Life shares to sell off this time but this will be a once off, — let 1994-95 look after itself and it will be a budgetary windfall for the Minister for Finance. I do not blame the Minister for trying to avail of this to get in a considerable amount of money. I think he agreed with the Opposition — although he never said this — that the original hot money amnesty would not bring in very much. The general amnesty he has introduced will mean that there will be many in the category referred to as the "small man". Therefore it is a budgetary provision.

I have some reservations about the absolutist nature of the amendment. The reform of the tax system must continue, I would like to rule out any prospect of its being used to restore equilibrium to the tax system. Some believe that the present structure of the tax system is an obstacle to work and we should not tie the Minister's hands in that regard. If we must at the end of the day approve this terrible amnesty, we might as well get in some money from it and allow the Minister the freedom to use it for the benefit of tax compliant citizens in the most productive manner possible.

This is the parting of the ways for me and Deputies Yates and Deputy Cox. The people who are already in the system should benefit from any proceeds raised as a result of this amnesty. Each week we have Private Members' Bills which call for increased expenditure in areas that cause me deep concern. This money is to be used to achieve some reduction of the national debt if we accept this amendment. The money should go to ensure that the services in being continue to be funded and their funding increased. To be parochial, I have only to look at the Midland Health Board which needs an increased allocation of moneys to employ extra staff, especially nursing staff. That is just one area. The Midlands have been devastated. We are highly dependent upon Bord na Móna where 2,500 people lost their jobs. People matter at the end of the day. We should not place everything into financial straitjackets. We will keep within the Maastricht guidelines but we should not be subservient, to an extent that prevents development at home. Bord na Móna would welcome £3 million for research and development. There is a tremendous capacity in Bord na Móna to generate employment. Last year alone in one fell swoop they captured over 25 per cent of the compost market in the UK. If the Minister gave them £3 million the sky would be the limit. They are saddled with a £190 million debt. They took all the restructuring proposals on board. They set autonomous groups in train. We should be talking about a part replacement of the borrowing with State equity. The Joint Oireachtas Committee on Commercial State-Sponsored Bodies recommended a debt reduction subsidy. We want to ensure the phasing of Board na Móna's debt reduction programme over a longer time. Let us assist native industry where there is potential for employment.

Let us look at the education system. I come from a family who were lucky; only for the education grants I would not have got an education. Now parents with two and three children are unable to fund them through education and so they are being denied the opportunity. A review group are to examine this but some money should be allocated to ease the restrictions on entry into education for people who find themselves in that difficulty.

Some of this money should be used to fund genuine tax relief for the hard pressed taxpayer who has already complied. I am on public record as expressing the distaste and odium with which I view the 1 per cent levy. I have already told the Minister in public that I will be watching carefully the framing of the January 1994 budget.

Aer Lingus needs £175 million. The money has to be found somewhere, and if it is coming from those sources, it is important that it be used within the Irish economy. We will keep within our Maastricht guidelines as set out and we do not want to appear to deviate in any way from them. We want to be the best Europeans in assisting, for example, people I meet daily in the Midlands and Westmeath in particular who are waiting for hip replacements and orthopaedic operations. An attack has been made on the waiting list by the allocation of £20 million. We need another £30 million for a proper attack on the waiting list. I would be delighted if I could go back to my constituents and tell them that some of this money will be devoted to ensuring speedier access to the hip operations and orthodontic treatment. Some of these people have waited long periods for treatment.

Some of the money should be allocated to the services area and to aiding some of the semi-State companies such as Bord na Móna who have tremendous potential for employment. Bord na Móna are now in the process of examining a new energy source which is going to bring tremendous benefits. We should also have in place the necessary structures for State equity in Bord an Móna. They have taken their medicine and I will be on the Minister's doorstep agitating on their behalf.

I ask Deputy Penrose to look at the amendment again because he seems to have ignored the last eight words which would accommodate about three-quarters of his shopping list, at least potentially. The thrust of the amendment is that there is only one point in favour of this amnesty, that the fact that you get your hands on revenue that otherwise you would have had. We do not and cannot know how much, but it will add to the tax base for good if the amnesty is as successful as its proponents say it will be. If it is as successful as the 1988 one, the addition to the tax base may be less spectacular than some of the proponents suggest based on the evidence that the Minister has given us from that experience. I do not have a problem about spending more money if you have got it, nor do I have a parsimonious attitude; if there is good equity investment to be made, make it. The fear I have if we get more money is that we will start to spend it in the health services and education but these will not be continuing revenue to meet the bill in future years. Does the Minister accept in broad terms the principle that where you have got a once-off revenue windfall, on balance you would not go on a splurge of additional current expenditure, for the obvious medium term budgetary reason that you come a cropper the following year? We do not need the whole degeneration of the tax system which this represents or a further degeneration of the spending system by winding up day-today spending on a once-off windfall. Does the Minister accept, if the substantial revenues of 14 January 1994 are effectively once off, that there is a requirement to spend it on things that are once-off and not recurrent? Othewise this explosion in additional revenue will leave a legacy of explosion in additional expenditure which will demand more taxes on compliant people paying the bill in the future.

I would like to refer to the Fine Gael amendment. In 1982 to 1987 we had the massive increase in the national debt from £12 billion to £24 or £25 billion. It is the height of hypocrisy now for Fina Gael to suggest that these moneys no matter now much is likely to be involved, be used to reduce that national debt. I do not know how much will be involved but, no matter what it is, if it is to be used for reducing the national debt the beneficial effect on society will be miniscule over the next ten or 15 years.

There is some merit in what the Progressive Democrats suggested today. They have two options, either reducing the national debt or funding capital projects. It is also important that it be used in current expenditure because we have in our society great demands in the areas of education, health and social welfare.

I referred to hypocrisy. We have motions coming in day after day at Private Members' Time and when other Bills are being discussed we hear our Fine Gael colleagues shouting for increased funding here, there and everywhere. If we get substantial funds here, they should be used in the current and capital project areas. Putting it into reducing the national debt would not be of great benefit to our society in the foreseeable future.

Money spent in reducing the national debt would not reflect greatly on the economy generally. This money would far more usefully be spent on various capital and revenue projects, for example, group water schemes, repair to replacement of bridges, the provision of lay-bys and county roads. I would agree with the idea of using some of this money to improve the higher education grants scheme and also for the provision of recreational facilities, particularly in large urban areas. That could be regarded as a worthwhile capital project.

In relation to the health services, there is unfortunately much demand for the provision of kidney dialysis units in general hospitals around the country and these could be provided out of the moneys which will come in under the amnesty. I would go along with Deputy Penrose's suggestion in relation to the reduction of the waiting lists for various services in hospitals. There is an unsatisfactorily long waiting list for hip replacements, eye operations and other personal services including dental and optical services.

I see nothing wrong with this money being used to help remove the 1 per cent levy next year if the Government decides it is wise and necessary to do so. It would be a very justifiable use of this money.

In years ahead, with Structural Funds moneys coming on stream and with the economy improving, we will be on a rising tide and it will be very easy to provide increases in current expenditure in 1995, 1996, and 1997. There is no reason this money should not be used for current expenditure.

A complete turn about has taken place in the debate. At first we had all these objections to collecting this money and now everybody is worried about how we are going to spend it. It proves the Minister's point that if there is money out there, we should get it and see what we can do with it.

Amendments Nos. 7 and 78 both refer to reducing the national debt. Deputy Cox's amendment also refers to capital projects. Very few capital projects do not have a revenue cost attached to them. You cannot have it both ways.

I would agree with my colleague, Deputy Penrose, who suggests that there are many worthy causes within our own jurisdiction. The 290,000 people who are unemployed must be a major concern for all of us. Most of us, unlike some others, are committed to public sector business such as Aer Lingus, Bord na Móna and other necessary enterprises which can create employment if we have the opportunity of giving them equity or changing their existing system of equity.

To confirm points that have been made by Deputy Rabbitte and many other people, the PAYE sector is the sector which has real concern about this type of legislation. One of the ways it could be given some meaning for them would be for the money received to go, either towards giving a service to them which they need — they are paying more for it than any other sector and still not getting a good service — or else reduce the burden of taxation on them.

I would suggest to the Minister — and I suppose it is a matter for Government, finally, how they will spend the money that comes in — that the view of people generally within parties who have a social conscience is that this should be used for the betterment of people at home. It should be applied to the services they need, to the public sector industry, which we are all talking about, whether it is Aer Lingus or another company. To apply it to the national dept will not be perceived by the genuine taxpayer as having justified giving a waiver to people outside the system.

I would support the arguments made by my colleague, Deputy Penrose, and others on this side of the House and recommend to the Minister that he should use the money in the way he knows all of us want it to be used.

One of the justifications I see for this tax amnesty is that the moneys that accrue from it should be directed back towards the people who have complied with the tax code. This must be done in a direct and clear way which may be seen as a return to them for having accepted such an amnesty. On that basis we should specifically target this money for special projects, as Deputy Penrose and other speakers have said. Otherwise the justification of the amnesty will be lost.

Receipts from previous tax amnesties have been brought to accounts as a current receipt in the year in which the moneys were received. The procedure is in accordance with the normal Government accounting practices. Such receipts do, of course, serve to reduce the Exchequer borrowing in the year concerned. To that extent it keeps the national debt lower than it would have been in the absence of these receipts. It seems to me to be a reasonable way of approaching the matter. For that reason I would not agree with the amendment.

I understand the reasoning of Deputy Cox and others. Clearly, once-off receipts should not be used in such a way as to worsen the Exchequer position in future years, for instance, by simply building up some ongoing expenditure. That is the point Deputy Cox makes. I would say to everybody on the committee that we are bound, for the future, to Maastricht guidelines. It is my duty, as Minister for Finance, to keep on reminding everybody of that, including my Government colleagues, my party colleagues and everybody in Dáil Éireann.

And yourself.

Deputy Noonan accused me after the budget, of not spending enough. I was the first Minister for Finance ever accused of not spending enough in a budget. I resisted the temptation that Deputy Noonan ofered me that day to spend more money. I decided to keep within the guidelines, to keep stability in the economy, to keep bringing down interest rates. I want to thank Deputy Yates for giving me the opportunity again to say that we have had the thirteenth consecutive drop in the SDF rate today. It is now 7.5 per cent, the lowest we have had. That was because I resisted the temptations of Deputy Noonan and others to spend more money.

I take Depty Cox's point. If you have £100 million coming in, in a once-off situation and you have £25 million built into your figures, that leaves only £75 million to spend on once-off issues. That is the essence of his point. If one says one has £100 million and spends £100 million on a permanent basis one will be in trouble because one will have to find £75 million one does not have in the following year. I would like to assure Depty Cox and the committee that that is the kind of basis on which we will make our judgments.

I have never made any predictions of how much money the amnesty will bring in. I feel enthusiastic listening to the committee that I will get hundreds of millions. I still hold to my view that I will tell Deputies at Christmas whether I got a bonus or not. We will make our decision when we see how much money we take in.

Deputy Walsh and others made the point that many programmes have been suppressed, because income has been suppressed over the years by individuals who have not sent in their true returns or legitimate figures to the Revenue. Many of the programmes one would like to fund, programmes for the disadvantaged or for health, etc., would probably be in place, or would have been expanded over the years, if people had not suppressed their income and had paid their true tax figures.

In so far as the 1988 amnesty improved the position, most of the gain of 1988 went to reduce taxation. That is how we brought the 65 per cent rate down over the last years to where it is today, at 48 per cent, and how we reduced the standard rate. Hopefully they are things we can do in the future.

Finally, I am certainly going to continue the commitment to observe the Maastricht budgetary criteria. I am giving that assurance. I therefore strongly support Revenue and continue to bring in powers for them with a view to achieving a state of affairs where people pay, there or thereabouts, their true tax.

I do not disagree with the point Deputy Rabbitte made before lunch. I am not going to lose sleep or hassle my colleagues in the finance unit or in Revenue in order to chase someone around Connemara for £25. I do not see that as my obligation. I do see it as an obligation and an objective, however, to try to get to a higher percentage of compliant tax-payers. That is an objective we should reach.

We should not get carried away with ourselves either. Deputy Yates gave us a factual report yesterday on the world reality of these things. My colleague, the Minister for Finance and Labour in Luxembourg — he has a double role — is the coolest dude of a politician I have ever seen. He has now held the position for about seven years and I think he is the senior member of the ECOFIN Council. The only time he ever gets upset is when the Germans talk about having standard rules on tax havens. Not alone does he lose his cool, he loses all sanity. We have to acknowledge the reality that these things are part of the international system. What we have to do is to try as hard as we can to turn this country into a compliant society. To do that——

I hope the Minister supports the Germans.

I always support them. Last year I went to significant lengths on the double taxation agreements, trying to ensure that our own TFSC would be the most transparent and well regulated financial centre in the Community. I agree with that because it is the way to do business.

I know Opposition spokespersons on finance met the German finance committee when it came here. The members of that committee were absolutely amazed to find out that the financial service was actually there. They reckoned it was like what they had heard about a lot of other countries, that one would go down and find a brass plate on a derelict site and if one kicked the door down one would see a field. They were absolutely fascinated to see that the regulation, organisation and co-ordination was as strong as it is. That is the way it should be in every part of Irish society.

I hope that at the end of this legislation we have, both on the social welfare side and on this side, a more compliant regime. That is what I am determined to work for.

Is the Deputy pressing amendment No. 7?

I will withdraw it but I want to make one further comment on amendment No. 78 before I do so as I will not be able to speak about it again.

I am very disappointed with the Minister's response. The clear lesson of the eighties both in the UK and here has been that borrowing today is tomorrow's taxation; borrowing is deferred taxation with interest. If we reduce the national debt we will reduce the cost of servicing that debt which, this year, is £2.45 billion. Think of all the health, education and welfare services that would provide.

I believe we have a long way to go to comply with the economic terms of convergence and we are now doing what Nigel Lawson did. He used capital receipts from privatisation in the eighties towards current revenue, which means that they now have an Exchequer deficit this year of £50 billion. The soft option, of course, the political and populist option is to wheel out everything from group water schemes to bogs, to the needs of the handicapped, etc.——

Is the Deputy not in favour of those?

Of course we are all in favour of it. We can all wheel out every cat and dog of public expenditure.


The Deputy is dismissing people——

Would Deputy Penrose allow Depty Yates to finish?

What we are saying is that, at the end of the day, all these things have to be paid for. If you pay for ongoing requirements with once-off money, which is what the Minister called this unprecedented amnesty money, it is unrealistic to cost them in on an annual basis. What you are actually doing is storing up trouble for yourself in the future.

We have come out of a period in the eighties where the debt got out of control and we must never return to that. The only way to ensure that is to use every opportunity where we have capital receipts, from privatisation or from amnesties, towards the national debt.

Unless the Minister is firm about that it would be impossible for his backbenchers to be able to do anything other than feed on the opportunities of pressing their own constituency requirements which will make the situation impossible in the future.

Whether you put a capital receipt off the national debt or whether by some once-off gain you reduce the current borrowing for that particular year, it has the same effect on the overall debt.

Not necessarily.

The British destroyed their economic prospects for about 20 years after World War II because of the alacrity with which they tried to diminish a debt. Indeed the debt to GDP ratio is falling steadily, for which the Minister deserves great credit.

Amendment, by leave, withdrawn.

Amendments Nos. 8, 14, 16, 17 and 25 to 28, inclusive, are related and will be discussed together, by agreement.

I move amendment No. 8:

In page 5, subsection (1), between lines 2 and 3, to interest the following definition:

"‘relevant years' means any year for which an application under the provisions of this section is received;".

Amendment No. 8 seeks to establish a definition of how far back someone could go in declaring undisclosed income. As I read the Bill it appeared to me there was no outer limit to such a declaration. This amendment and amendment No. 14 set it out that for each individual year a declaration would have to be made. The earnings for each individual year would be attributable to that year.

When people are furiously waving these black certificates around at the auditors who come sniffing at the door, at lest the appeal commissioners will have something to adjudicate on, not just a global figure. People would not be able to diminish the prospects of having an investigative audit by grouping the years together.

This is a minimalist measure which is necessary to bring some sort of order out of the chaos proposed in this amnesty.

I agree this is a minimalist measure to assist the business of checking the declarations made by the tax cheats.

I was a bit surprised this morning that people could not see the relevance of the special collector system and how it is specially designed to ensure that the left hand does not know what the right hand is doing. It is not possible, as we have now established, to check on it subsequently. One of the reasons it is not possible is that there is no commencement date. The tax inspector for subsequent years will not be able to tell from the return of income whether or not it is consistent with the self-declaration made by the tax cheat to avail of this amnesty. There is no returns of income for any year required in the declaration. A person will make a block declaration. There is no year of commencement. There is no special return for any given year and, therefore, you are not comparing like with like. It is important to put in the definition "relevant year".

I was critical of the media this morning in so much as experts in the media have not taken this Bill apart and looked at it. They have taken the handouts and one of them stated that the terms of the amnesty would be revoked if those availing of it completed a false declaration for 1992-93. This is untrue. The only provision in the Bill is the submission of a timely return, not a correct one. One is required to make a timely return but there is no requirement that it be correct. We have identical wording in section 8. At least they will be required to submit accounts for the relevant years for which they are seeking the cover of the amnesty. I think "relevant year" is absolutely critical. One of the interesting things, for example, is that corporation profits tax is one of the taxes covered. Was not corporation profits tax abolished in 1976 or does my memory fail me? The only reason corporation profits tax is covered is that some of the Minister's advisers anticipate that some of these cheats will go back to 1976 or beyond. It is quite fantastic to think that they can make a declaration of their own assessment in a block way covering 15 to 20 years. That is what an unfortunate tax inspector in ensuing years is expected to compare returns with, which is, of course, nonsense. It is a clever and deliberately constructed system to obscure, conceal and protect tax cheats. It is the old question, as I said this morning, of the drunken driver being able to pull a black certificate out of his pocket, show it to a garda sergeant and be waved on.

I recognise the impact of the various amendments and would be very happy to support them. I ask the Minister, given that declarations are not made for each year in the manner prescribed by the amendments, to explain the following. If an individual had £500,000 and declared it had been accumulated at the rate of £25,000 a year for each of 20 years and he wanted to avail of the 15 per cent rate and then declared for 1992-93 the £25,000pro rata amount for that due year but, in fact, had salted the £500,000 away in the two years prior to April 1991, how can you do anything about it? I declare my half a million at 15 per cent to legitimise this money accumulated over 20 years. I declare that I want to bring back £500,000 and I explain that it was saved in dribs and drabs over the years. In fact it may have been as a result of a big killing in one year but, I can get away with it by suggesting that it was in dribs and drabs and, by declaring the equivalent amount for 1992-93, create no capacity in the rest of the system to come back at me. If the Minister does not require it to be done annually I do not know how it will be accountable in the context of the later checks and balances the Minister says are in the system.

There are a number of amendments here and all of them require individuals availing of the 15 per cent incentive or making VAT payments to the chief collector to provide a year by year breakdown of all concealed income, chargeable gains or VAT. There is merit behind some of the points. The incentive amnesty has two principal objectives. The first is to take in the maximum amount of tax paid at 15 per cent in respect of the periods up to 1991, the bulk of which in all probability would not otherwise be declared to the Exchequer. The second is, having enabled taxpayers to make a new start, to create a substantial new body of compliant taxpayers for the year 1992-93. I repeat what I said this morning about the year 1992-93. There is no immunity from investigation for 1992-93 and if the inspector establishes substantial capital and income in 1992-93 the taxpayer will have to try to prove that his declaration is correct, otherwise the inspector will work back from 1992-93 and——

But he cannot.

——will use the certificate for 1992-93, which must be lodged by 31 January next year following the payment which has to be made by mid-December and the declaration which has to be made by the end of November. They are the three dates. The certificate will not protect the taxpayer from this approach.

Deputy Rabbitte asked where under the Bill was a person obliged to make a correct return. Section 4 (3) (a) states: In subsection (1) "return of income" and "specified date" have the meanings assigned to them by section 48 of the Finance Act, 1986. The point raised by the Deputy, that the returns in question should be full and correct is already catered for in section 4 (3) (a). Section 4 (3) (b) of the section provides that: "The provisions of subsection (1) (b) of section 48 of the Finance Act, 1986, shall apply for the purposes of". . . section 4 of the Bill. This ensures that in the circumstances outlined in the provisions, namely the fraudulent or negligent delivery of an incorrect return, the failure to rectify a known error in a return which has been delivered to the inspector and the failure to respond to an inspector's inquiry in relation to a return which has been delivered to him, a person will not be regarded as having made a return of income on or before the specified date in relation to that return.

Is that the return referred to for 1992-93?

So we are not talking about the earlier bit in that regard?

We are talking about getting the return right for 1992-93.

Your certificate——

This is not a section 2 item, in other words, this is the regular tax code.

Deputy Rabbitte said there was no sanction if one made an incorrect return.

The tax inspector will not know whether the person had done wrong by his 1992-93 return because he will not have anything to compare it to and when he seeks to compare it the person will produce the black certificate. Since it is a block submission you are not comparing like with like and it would be a very stupid amnestee — I do not know what the term is but as we are in a parliamentary committee I will try to confine myself to parliamentary language — who would present returns for 1992-93 which would expose him to the tax inspector and lead to a withdrawal of the protection afforded by the amnesty? They would need to be very stupid to do that and, whatever else they are, they are not stupid.

A tax inspector has an absolute right to audit anything in the 1992-93 returns. There is no protection for a non-compliant taxpayer if an inspector believes that there is anything wrong with the 1992-93 returns. The fact that they put it into the special section will not afford them any protection. It does not just apply next year because if in future years an inspector believes that the 1992-93 return was out of line, based on the figures in the 1994-95, 1995-96 returns they can then go back to that basis.

Let us take an example to explain it. A Deputy in the House approached me recently— I will not use his name without his permission — to say that my view on this was wrong. He knew there was money out there and that it was in the interests of the country to get it back and put it to productive use. That is his point of view and he is entitled to it. He gave me the example of somebody from his own county who told him that he had £38 million and now wanted to relocate it here. Take the case of someone with £38 million abroad. He can make a part disclosure, bring back £5 million and pay 15 per cent off the top of that or indeed he can bring back £1 million and pay 15 per cent off the top of it in return for which he gets a very valuable black certificate which can prevent any investigation of his affairs before 5 April 1991. The inspector will never know that he has £37 million left abroad or that he is engaged in other activities. Any decent tax adviser will ensure that his returns for 1992-93 are consistent with what he has declared to the Revenue Commissioners.

The IMPACT trade union represents tax inspectors and they stated that the whole concept of a special collector is designed to ensure that the left hand will not know what the right hand is doing. At best this will be an administrative nightmare; at worst it will provide immunity from audit for anyone who makes a half baked disclosure. Any intending tax cheats would be well advised to make a small disclosure, get his certificate from the special collector and thumb his nose at the tax inspector or indeed the Collector General when they seek to collect the proper taxes. The penalty provisions in section 9 can have no bite if the inspector is deliberately kept in the dark and prevented from making inquiries. Of course, the inspector is kept in the dark and he cannot make inquiries because he is blocked by the certificate.

If we are giving everybody the opportunity to write their own tax returns to avail of this amnesty, let us say that but do not let us pretend that the amnestee is going to be caught out when he makes his 1992-93 returns. The only way he will be caught out is if he is foolish enough to make returns that are inconsistent with the statement in such a manifestly awkward or stupid way that the tax inspector can catch him. If the special collector, as I said on Second Stage, mutters something to himself when he is asleep at night he is open to a penalty. The tax inspector cannot probe it in that way.

I urge the Minister to accept the amendment which seeks to have accounts for the relevant year and also this amendment.

I would like to inquire about the year 1991-92. The relevant date is 5 April 1991. Presumably most of the 1991-92 returns have been made already. If a person includes some of this hot money in the 1992-93 returns it would imply that the 1991-92 returns were incorrect. Is there a provision which would allow him to make a further submission for 1991-92 in order to regularise the position?

That is a very good point.

I thought it was an oversight by the Minister that they had not put in "relevant year". I thought this was a technical amendment. I was quite shocked to hear the Minister say it was deliberate and was for two reasons: to get the maximum amount of money and to get as many as possible into the new body of compliant taxpayers. Underlying this is a huge sense of greed — grab all we can. In fact this will yield less money because people will minimise the amount they are going to declare. What they will do is ask: "What is my worst liability with my maximum disclosure in any one year" and that is the amount they will put in as their declared earnings. They will pay 15 per cent on that. At the appeal hearing they will say, yes, in that year I made all the money and that is how I came to declare what I declared. If we do not put in "relevant year" it will be impossible for the Revenue Commissioners to overcome the black certificate and make any case to the appeal commissioners.

The person with £38 million will declare whatever is his worst liability in any one year. The Revenue Commissioners may not have evidence that in previous or subsequent years he also had undisclosed money. It will give a claimant huge potential to arrange the case to be made to the appeal commissioners. It will diminish the yield instead of increasing it.

The function of the special collector is to meet the non-compliant taxpayer, receive the money and issue the certificate. The special collector is not the individual who investigates cheques or goes through any audit procedure. That is a matter for the Revenue Commissioners and the special unit. I just want to make that point again. I know Deputy Rabbitte understands that point from this morning's debate. They are not checking anything other than the non-compliant taxpayer who approaches them and gives the data.

That is precisely my point.

That is where we disagree. The second point relates to the point made by Deputy Cox. There are non-compliant taxpayers outside the system and in the system. They supress income through their profits, income tax or VAT and so on and they either lodge that money abroad or in dormant accounts or perhaps they just put it into property. We have two categories — one category of people are totally non-compliant and not know to the Revenue Commissioners because they are outside the system and the other category are known to the Revenue Commissioners. They forward accounts, sometimes through their own tax advisers which means they are not giving them the full facts. When they come into the special collector they will declare the total sum of their undisclosed liabilities up to and including 5 April 1991.

They will say "Here I am, £100,000, here is a cheque for £15,000 thank you very much. Here is your Certificate".

That is correct, but that is not the end of the story and that is the mistake Deputy Rabbitte is making. He believes that when you walk into Dublin Castle or wherever this office will be, you put your hands up and say "I am Pat Rabbitte, I am from Tallaght, I am declaring £100,000 of undisclosed—"

A Deputy

There is not £100,000 in the whole of Tallaght.

I will tell you in December whether there are any undisclosed people in Tallaght. I cannot say I got one of those in the post this morning.

We were at a critical juncture. We were about to find out how his declaration is assessed.

Let us take Deputy Cox's figures so that we are not using two figures. The person puts a hand up and declares undisclosed liabilities of £500,000, remembering that the law says it has to be full declaration, it has to be the total liabilities, otherwise he cannot walk out of that room knowing he has absolute immunity. This is the key point and I accept it is very important, otherwise why would somebody come forward? If he is safely offshore and has some of his money invested in a nice house in the Canaries, other money in the Isle of Man and some in some hidden account, he does not give two damns and he will not be calling into the collector's office. People will be calling in because they want to right their wrongs of the past, they want immunity in the future, they want to become complying taxpayers and they are going to pay up, otherwise they will not be bothering with it, and that is why they did not bother in 1988. The people we are talking about did not bother themselves in 1988. The amnesty certificate which they walk out with will contain the details of the declared amounts and the settlement amounts. If this certificate is subsequently presented to block an audit, which is what Deputy Rabbitte is saying, where a subsequent audit has revealed under-declaration and if the settlement amount do not correspond with the subsequent figures, then the amnesty years can be audited and the appropriate penalties applied. To follow Deputy Cox's point. If an individual comes in and says, "I have £25,000 over 20 years and I want to pay my 15 per cent", and then fills in the 1992-93 form, it becomes very clear to whatever tax inspector is looking at it that he started the business five years ago. That person is goosed straight away because that can be traced back. From the point of view that they have cleared themselves and brought themselves up to line, that is what the amnesty is about.

We are trying to reach non-complying taxpayers who have undisclosed liability. They come out of the dead wood, back from the Isle of Man or wherever, change to their right names and declare the sums of money. If they do that and then stay straight, there is no problem, but if they come back, pay their 15 per cent and continue to be non-compliant they will be caught. They will be in the system, maybe partially, like the man with the £1 million out of his £38 million, but there is nothing to stop the Revenue Commissioners in future from tracking him on the rest of the millions and he will not dodge them, whether he buys property or shares or it is attached in some other way. There is no benefit in bringing back just a part of the money and then trying to go his merry way because all the catches that he can be caught with now are still open to the Revenue Commissioners. That is the net point. The people who would like an open set and game do not like 1992-93 being included in. People who want an amnesty but do not want the people to remain in the base of complying tax payers in future hate the clause that includes 1992-93.

Let me reply to that. The Minister says that it is of no benefit to him. It is of benefit to him because the same person can avail of the general amnesty also and he very probably has a finger in a number of pies, so all he needs is a tax adviser who is awake to stay consistent. The Minister has agreed that there is absolutely no obligation on him except to walk into Dublin Castle or, more properly, have somebody to walk in on his behalf who is well paid for doing the walking in, make a declaration and nobody can look behind it. The purpose of the special collector, as the Minister has conceeded, is purely to collect the cheque and give out the amnesty certificate.

That is only the start of it.

That is only the start of it. Consider the nature of that declaration. The Minister is approaching this from the point of view of a law-abiding citizen, but by definition we are talking about people who have broken the law. Are they going to make a full statement? Section 2 (3) of the Bill provides that an individual to whom this section applies shall within the specified period give a declaration in writing to the Chief Special Collector. Thers is no definition of years, documentary evidence, audited accounts, no requirement at all. My colleagues in the trade union movement in IMPACT say that the legislation provides that an inspector will be free to reexamine the case where he has reasonable grounds for believing that the declaration to the special controller is not a full disclosure. This is the Minister's point, but these are the guys who work the system and they go on to say that this is circumvented in a number of ways. Firstly, the inspector can be prevented from commencing the investigation by the production of a receipt from the special collector. Secondly, if, however, the inspector has managed to commence the investigation without the tax chief's knowledge, the investigation can be stopped by applying to the Appeal Commissioners and requiring the inspectors to provide evidence that the declaration to the special collector was not a full declaration. They say that since the Inspector is legally prevented from assessing the information which the special collector was given, it is impossible to establish that it was incorrect in the first place. Thirdly, the information provided on the receipt from the special collector cannot assist the inspector as it can cover several years and does not indicate the commencement year.

How could he possibly assess it? You do not know whether it is going back to the corporation tax year of 1976 or merely back to 1989. No tax inspector in Dublin Castle could possibly compare it because he is fumbling around completely in the dark and of course the attraction is that it gives those guys total impunity.

I am not citing a document from people on the inside but citing the legislation in front of us. The Minister is saying to us that you go in and try to regularise your situation under "Albert's amnesty" and that you get your certificate, but that really does not mean very much because you have to declare for 1992-93 and then the Revenue can come down on you like a ton of bricks, as is their wont. What then is the meaning of section 5 (1) which provides that an inspector or other officer of the Revenue Commissioners may commence to make such inquiries, or take such action, as are within his powers, or gives a notice in writing to an individual of his intention to make such inquiries or take such action. It also states that the inspector or other officer shall, on production to him of the said certificate and on validation of that certificate in accordance with the provisions of paragraph (a) of the proviso to section 7 (4), be precluded from continuing with or commencing said inquiries, unless, on application by him to the Appeal Commissioners he shows there is a case. Now we go to the Appeal Commissioner. A certificate arrives and he is not entitled to know its commencement date or the relevant taxes or the relevant years to which it relates and in this blind ignorance the Appeal Commissioner is meant to give a considered view as to what the liability is. How can any adjudicator adjudicate in ignorance? How can you go in and not give the information and invite an adjudication on the very information that you cannot have? It is a preposterous suggestion, and this is the law.

I do not disagree with the commentary that the Deputy has read into the record, but it seems that the ordinary law for the Revenue man is one law for the amnesty cheat and one law for the rest of us if we are not amnesty cheats. For the amnesty cheat the continuation of an inquiry can be precluded or, stopped at commencement or if it goes to the Appeal Commissioner he has to adjudicate in blind ignorance of the essential facts upon which the certificate was issued. It is a fundamental flaw in this legislation which opens up a black hole into which no Revenue person or Appeal Commissioner by normal due process can validly expect to retrieve any reasonable return.

There is no restriction whatsoever on the investigation into 1992-93. If the inspector discovers that the return for 1992-93 is incomplete in any way then the amnesty certificate becomes null and void. An inspector investigating the 1992-93 returns can go back and ask what years refer. The only figures that qualify for the 15 per cent are the income tax and capital gains tax. One must complete one's return on all the other taxes. Under the legislation one has to comply with both the incentive amnesty and the general amnesty. A person who has undeclared taxes under various subheadings has to pay the full amount to gain the benefits. If he has incurred capital acquisitions or other taxes he has to declare all of those taxes. It is only in the case of income and capital gains tax that he does not have to specify the years. On the other taxes he has to give the full details.

Take a non-compliant business person who has accumulated undisclosed liabilities; he is going to have undisclosed liabilities across all tax heads. I have never known of one who did not. He will have them under income tax, capital gains tax, capital acquisitions tax, corporation tax, VAT and a whole range of taxes. The 15 per cent incentive is allowed only under the two headings. Under all other headings the full amount must be paid. Therefore, an inspector looking back on a completed return for 1992 has a considerable amount of detail from the start. The individual going in to the special collector's office must declare the full amount knowing that he is covered under both the incentive and general amnesties. The person who tells a pack of lies about his returns will find that is only the start of the story. He will fill in his 1992-93 form and by the end of next January he will be in trouble.

Listening to tax advisers and tax consultants in the last few weeks I do not believe they will allow people to follow that course because they will have to stand over the advice they give. I do not think the non-compliant individual who has probably not told the whole story to the tax adviser or is making his own returns — there are not too many of them in that category — will take that chance. I believe the persons who take the opportunity offered here will be exonerating themselves and setting themselves right for the future.

We could argue until Christmas whether it is right that a person who is going to go straight from here on in can declose his undisclosed liabilities for the last 20 years and pay only 15 per cent on part of them. If we do not give that incentive we will not get the person to come in. There is no point in arguing about the rights or the wrongs of the amnesty. Once the persons are in, there is a clear audit trail the Revenue Commissioners can follow.

It seems that the Minister is having a classic each way bet. He is telling us as critics, questioning the sum of these parts and what level of immunity is offered, that it is not really what we think and that the 1992-93 tax declaration is going to provide the Revenue Commissioners with a can opener to lift the lid of every affair going back over all the years of every business person or every individual who has come in and declared under section 2 to avail of the amnesty.

If it is found that that person is not telling the truth.

I will finish the point. Is the Minister telling us that there is a can opener available in the 1992-93 year if an individual is not telling the truth and that the can opener can go right back down into everything on all tax fronts? Under section 5 of the Bill he is saying to induce everyone to avail of this provision: "By the way, we are giving you an immunity certificate and if you are being honest with us, which we cannot check because we have to take the declaration as truth, you can stop an inquiry from commencing by the simple production of this certificate, or even if it goes to an appeal commissioner, he cannot know all the detail that went into it."

It is income tax, capital gains tax and levies, under section 2, and under section 3 it is VAT, which is potentially enormous. An individual can go in with VAT dirty work to get an immunity certificate. Although one does not get the 15 per cent rate and pays the full VAT, section 3 under the general amnesty offers the VAT cheat the opportunity to immunise himself or herself for the future as per the section 2 provision. When all of that is added up it is potentially a big slice of activity. It seems there still is the each way bet. The Minister tells us the 1992-93 declaration can be used as a can opener to strip bare every detail of the tax liability of this person and he tells the same person who is not yet in the system that when he produces the certificate the Revenue Commissioners will be coming after him. The Minister cannot have it each way.

I am happy to withdraw the amendment. The Minister in defence of this makes it sound as if he is setting a nice ripe piece of cheese as a bait in the hope that tax evaders will nibble and then the trap will come down on top of them.

If you come in and take the bit of cheese and then continue to be a messer you are going to be caught.

The cute mouse once he sees his brother or sister has got fat——

The non-compliant tax-payer is shouting for an amnesty because the trap is getting nearer all the time.

To establish the truth of what is a full and total declaration of income is made more difficult by not accepting this amendment. This amendment segments it into an annualised basis of years. It makes it more difficult for the Revenue Commissioners to make it a piece of cheese on the trap as compared to, say, something that gives immunity from drink driving prosecution. We have debated it adequately and I am happy to withdraw this amendment.

Amendment, by leave, withdrawn.

Amendment No. 9. It has been agreed that we will finish section 2 at 4 o'clock.

I move amendment No. 9:

In page 5, subsection (2) (a), lines 11 and 12, to delete "25th day of May" and substitute "28th day of August".

This is to give the Revenue Commissioners an each way bet. The provision in the Bill is that if on the day the amnesty was announced, namely, 25 May, the Revenue Commissioners had any inquiries into the tax affairs of a possible claimant, then they cannot avail of the benefit of this amnesty. I wish to allow the Revenue Commissioners until 25 August to write to people whom they could have been investigating for some time. I read the Sunday newspapers about "operation bell" in relation to the bookmaking business. It is quite obvious that two years of very thorough research has gone into activity by the Customs and Excise people to catch 25 bookmakers. Imagine if this had applied in this case, if they had done all the investigation, got all the case histories together but had not written out to anyone before 25 May. This allows them to pre-empt the possible benefits of amnesty for people who they are 99 per cent sure are tax evaders because one cannot get this evidence overnight.

Everything is ongoing in the Revenue audit section, in the special investigation sections. Imagine if one had assigned staff who had a case put together to deal with the particular elements of tax fraud and tax evasion but when the guillotine came down on 25 May, they did not have their letter sent in time. Regardless of the strength of the case the people concerned could have obtained the amnesty, waved the black certificate in one's face and walked away with a minimal declaration.

The amendment proposes to allow a clawback by the Revenue Commissioners to exempt known evaders.

Does the Deputy wish to press his amendment?

I would like to hear the Minister's reply, briefly.

When the terms of the amnesty are fully complied with by an individual availing of it, Revenue will not be able to investigate the individual for the period up to April, 1991 if the investigation has not started before 25 May. That is what the Bill says.

However, if the incentive amnesty, by definition, involves foregoing tax liabilities, because it is 15 per cent, to move the critical date forward three months would give Revenue a last flurry of activity disqualifying many from the terms of the incentive scheme. We have indicated those already excluded from it but if one were to move the relevant date forward three months there would be many more. There would be all kinds of arguments and debates and I doubt that this would be an appropriate way to proceed with what is a pragmatic amnesty to try to tidy up matters. It would be hard to justify the wholesale disqualification of individuals from the incentive scheme as a result of what would be considered a frenzy of activity.

Once the decision was made to have an amnesty it was necessary to implement the decision without delay and this is being done. To postpone it would create chaos in the system.

The Minister could not have said more eloquently that the Revenue Commissioners were opposed to this amnesty. He has just said there would be a frenzy, a flurry of activity in relation to potential tax evaders that the Revenue Commissioners would immediately seek to exclude from this if they had their way. Really, the Minister has just relayed to us that the Revenue Commissioners are totally opposed to this amnesty which the Government has foisted upon them.

There is no doubt in my mind that if you push the date forward a week or a month after 25 May every single Revenue audit, check, examination and phonecall would be considered to be an effort to get all of this work done before the relevant date. It is not a question of what Revenue do or do not think, that is how it would be perceived.

People would assume the Revenue Commission was trying to get this, that and the other done before bringing in an amnesty. We could not operate like that. People would be trying to get their meetings put back until after 25 August, they would not turn up for other meetings, they would not answer letters, they would not be clear as to what was going to happen for 1991-92 and 1992-93. One could not run the Revenue office in that way.

The only way to do it, once the Government had made a decision, was to put down that day as being the day on which we draw the line to begin the amnesty. One could not do it otherwise.

Amendment, by leave, withdrawn.

I move amendment No. 10:

In page 5, subsection (2) (b), to delete lines 47 to 50.

I proposed this amendment for the purpose of debate and I reserve the right to put in some alternative formulation on Report Stage. It is not that I incline necessarily towards a total deletion but I find it very difficult to understand, in the context of the provisions of paragraph (b). This says that anyone who has been engaged in a tax scheme where the main purpose, or one of the main purposes, was tax avoidance cannot, in respect of that money, claim the amnesty for hot money. Tax avoidance is where you play the system to its limits but it is still technically within the law. Later in the paragraph it says that tax evasion is included in the amnesty. So, where you wilfully defrauded the taxman you are included. Where you use the existing law, which the taxman had drawn up, and use it in a way that the taxman might prefer that you did not, but in a way that is still lawful, you are excluded.

I find it extraordinary that wilful defrauders are in on the amnesty, given the Minister's logic that he is out to squeeze every drop of blood that he can in Revenue terms. I do not so much want to delete the lines mentioned in the amendment as I have a discussion on it.

I have the impression that this holdall clause would get at certain property transactions that occurred in parts of this city at not too great a distance from where we are now sitting, transactions from which the money is sitting in an account in Jersey, where there is a very bad odour off its accumulation. That money would, in the normal course of events, have attracted a considerable amount of capital gains tax but, through various devices and manoeuvrings, it did not. Hence, if the main purpose was to avoid a tax, this excludes it. If we are dealing here with matters like the Telecom Éireann site, then we could say so. It seems to me extraordinary as a general proposition that above and beyond the Telecoms of the world we are saying to people who have cheated — this is a cheat's amnesty, a cheat's charter——

Not true.

Yes, section 2 is the cheat's charter, as was the original amnesty. In section 2 we are saying to people who avoided paying tax but were just about within the law, that this is so unacceptable they cannot have an amnesty but if they wilfully defrauded through evasion, that is acceptable, and we will give them an amnesty. In this perverse legislation this strikes me as profoundly illogical, even by the standards of the legislation itself. I would like an explanation and I want to know if this is the Telecom Éireann clause, among others.

In the last few moments I have been handed a copy of what was sent to the Minister this morning by the President of the Law Society, which has, in the very short time available to it, studied this Bill. It is a rather stinging rebuke in relation to technical errors in the Bill, bad draftsmanship and rushed preparation as well as points of detail.

I hope the Minister will carefully study the submission because even if he were to bring forward amendments at Report Stage it would be valuable. It makes the point Deputy Cox has made. An anomaly arises here in so far as the provisions of this particular part exclude from the definition of relevant tax any sum not paid by virtue of a legal tax avoidance as opposed to an evasion scheme, whereas people who break the law entirely in a rogue-like way can get the benefit of the amnesty. That seems on the face of it to be unjust.

I ask the Minister to redraft section 2 (2) (b) (v). In so far as we are going to have an unprincipled approach to this whole thing, given the size of the Government's majority, there should be some justice amongst thieves as it were, and people who legally avoided tax should be given the possibility of benefiting from this.

With reference to Deputy Yate's point about the Law Society's letter, in actual fact they did not do me the courtesy of sending me the letter this morning. I checked if there were letters this morning. I have just checked with my colleagues from Revenue——

It says here——

Evidently they sent it to the Deputy first and then sent it over. That would not be the first time that happened. We now know who has the most support in the Law Society.


I assure Deputy Yates that we will look at any drafting or other points that my good friends in the Law Society may make.

Tax avoidance schemes, generally, have been broken by Revenue in recent years. There have been a number of significant ones where Revenue has been in negotiation with the people behind them. We are talking about substantial money and Revenue have got underneath them and, to their credit, have received large settlements in some cases. Other settlements are under negotiation. They will not get the benefit of this amnesty.

Tax avoidance schemes — there are many and I am not talking about any individual one — have been in the public eye for a long time. They will not, in any way, benefit from the 15 per cent amnesty, for the practical reason that Revenue know about them and are pursuing the tax in the schemes. The point of the amnesty is not to forego tax which they are going to receive in any event. I want to make that clear.

Not mentioning particular cases, I would like to point out generally that under the terms of the legislation companies as distinct from individuals are not within the scope of the special incentive amnesty. That would cover some cases that have become well known in recent times.

It depends whether the individuals or companies claim to be the beneficial owners.

Individuals who have been notified that they are under investigation or that the inspector intended to make any inquiries are excluded from the scope of the special incentive scheme and any sum which was not paid on or before 25 May of this year by virtue of the tax avoidance schemes is also excluded from the 15 per cent amnesty. The amnesty for interest and penalties which we will be debating is more generally available. I cannot delineate which companies or individuals may or may not benefit from relief on interest and penalties while paying the underlying tax but certainly, in regard to the 15 per cent, these cases are excluded.

The Minister says the Revenue are doing very well at cracking avoidance schemes. If they are, I take my hat off to them. I am pleased to hear it. I suspect even if we did not have an amnesty they would crack a lot more nuts without having to lose a lot of this tax.

Where revenue is conducting an investigation, am I not correct in believing that section 2 (2) (a) (i) already excludes the case? The explanation given by the Minister — if you already have some one on the ropes, why let them off the ropes — is fair enough but where there is no current investigation, why are avoidance schemes excluded? I only ask this because, logically, if the Minister follows his explanation that he wants to use this as a magnet to attract back into the system all the errant would-be taxpayers, why does the Minister not simply exclude tax avoidance schemes he knows of already under section 2 (2) (a) (i)? Presumably there must be some he does not know of, unless that section in Revenue is omniscient while the others are not.

Areas of tax avoidance where Revenue believe they will raise the money and which are under investigation are excluded". If there are other ones which are not known to them and it is subsequently found that any of these come into the category of avoidance schemes which they are illegal, they are also going to be excluded. If some individual is operating some scam which has never been heard of, we cannot make a judgment on that now.

This excludes such an individual?

Yes. If we knew it today, it probably would be excluded.

It would be, under section 2 (2) (a) (i), which refers to section 15 of the Finance Act, 1988.

He would have to be under investigation as of today in order to be excluded.

I do not want to mention prominent cases because this does not refer to any one case. There are a number of cases. There is one prominent case that has nothing to do with present investigations as it has gone on for some time and the Revenue have cracked it. We are talking about extremely big money. The people concerned were lobbying to be covered by this Bill. I received at least one letter myself on it but, in my view, they could not be included in an amnesty. It took considerable resources and effort by Revenue to crack those schemes.

Are they not already excluded by virtue of an earlier part of section 2 of the Bill which refers to section 15 of the Finance Act, 1988. Does this not refer to a case where examinations are in progress which would mean that case would be excluded.

The cracking of an avoidance case is not normally done only by a Revenue audit. It is often done by court case for some legal reason and that is how the prominent ones of late have been done. They have been achieved by means of legal cases.

I withdraw the amendment and reserve the right to have a look at it again at Report Stage.

Amendment, by leave, withdrawn.

Amendment No. 11 is in the name of Deputy Yates. Amendment No. 80 is related. It is proposed to take amendments Nos. 11 and 80 together by agreement. Is that agreed? Agreed.

I move amendment No. 11:

In page 6, lines 14 to 35, to delete subsection (3).

This covers the points made this morning. This is the guts of the self declaration whether people come into Dublin Castle or the Shelbourne Hotel and come away with their black certificates. Section 2 (3) of the Bill allows them to do it. This is totally unprecedented in tax law because people can walk in, make a declaration and have a fairly good chance that they will get away with it. It might not be a full declaration and they will get the certificate which, for the first time in the history of the State, will mean that their tax will be written down. Before, we have had amnesties on interest and penalties but this actually writes down tax to 15 per cent.

The whole basic tenet and kernel of this is wrong. Section 2 (3) (a) (iv) states: "declares that neither the declared amounts nor any part of those amounts arose from, or by reason of, an unlawful source or activity, (other than the evasion of tax. . . " which is now perfectly all right. Here we have people who may be involved in subversive organisations, drug trafficking, may be well known criminals in this town whom the Special Branch have been chasing for some time. Does anyone think they will be troubled or lose any sleep at night or have conscience problems about making a false declaration in relation to their ill-gotten gains? It would not cost them a thought. The special collector cannot ask: "Are you the well-known criminal in Dublin or are you down from Crossmaglen or somewhere else with this money? Has this money come from a Mafia source abroad?"

A basic minimum requirement to ensure that moneys are not the proceeds of crime is that an additional certificate from the Garda Commissioner be required. The Garda Síochána know, only too well, who are the potential sources of money that could have been taken from bank robberies or money laundered in a variety of ways.

This is all part of the Government's desperate grab to get money. I do not think we should be so free and easy in granting these black certificates when they could refer, potentially, to the proceeds of crime.

I will not repeat the points made this morning about how a full and true statement could be proved. It is very hard to prove and establish what the truth is. We have established that people making declarations do not have to specify the years involved.

I want to deal with amendment No. 12 which is grouped with amendment No. 13 which seeks that they would at least have to provide audited accounts and some form of documentary evidence to show it is a full declaration. That is standard practice with all forms of self-assessment.

Section 3 is the most fundamentally flawed aspect of the Bill. Are we offering an amnesty to people who broke company law, exchange control laws, defaulted creditors and moved money abroad just before liquidations or receiverships? There are myriad ways people could have creamed off money which breaks more than the tax laws. It runs a coach and four through a variety of laws. I am afraid that the nature of this amnesty also gives immunity and indemnity from the criminal process. It would be no harm in the event of some mysterious sources being unearthed by this amnesty to give the Garda Commissioner an opportunity to refuse to give a certificate.

Deputy Yates is right. We should move on to amendments Nos. 12 and 13 which go to the heart of the matter. Because of the time constraints I do not want to repeat the arguments on it. I notice the committee is being televised. If the people could see this committee debating amendment by amendment, I do not think we would need to worry about how big a majority the Government has. It would not enact this legislation. Unfortunately the people do not know about it.

The Taoiseach gave a commitment that before anybody could avail of the amnesty they would have to pay the PAYE deducted from workers or the VAT collected from customers. There is no such provision in the Bill. It requires an explicit provision, otherwise it makes a total mockery of what we are seeking to do. The Taoiseach gave a guarantee that it would not happen but people who deducted money from PAYE workers over the years and have not handed it over can make a declaration. It is appalling.

I share Deputy Yate's concern that the amnesty should not be used to launder illegal gains. I am not clear as to how an amnesty certificate would benefit a criminal. I agree with Deputy Yates that they would not be too worried about the amnesty, full stop. Deputy Yates knows that income from illegal gain is unlawful under section 18 of the Finance Act, 1983, which was a controversial section in its day. Under this legislation those laundering money or in receipt of money from illegal gain cannot benefit from the amnesty and if the Revenue Commissioners working with the Garda or with their various investigation branches were to find that this was the case later there is provision under the Act for a term of imprisonment of eight years. I would like to think that criminal elements would walk into it that simply but unfortunately I do not believe they will do us that service. The Revenue Commissioners and the Garda co-operate with each other and will probably solve that problem but I do not want to say too much about that because I think people have a good idea how these things work.

One of the conditions is that the taxpayer must make and sign the declaration and that includes a declaration that no part of the declared income or gains arose from unlawful sources or activities. If it is proved that the declaration is false the taxpayer will be denied the benefit of the amnesty and the amnesty will afford no protection against further liabilities to tax. If the income or gains arose from illegal activities which are subject to non tax inquiries in the State or in other jurisdictions, the fact that the person availed of the amnesty will have no effect on those inquiries as the amnesty will do no more than protect them against tax interests or penalties in the State.

Amendment put and declared lost.

Amendment No. 12 is related to amendments Nos. 13, 15, 19, 20, 24, 36 and 37 and all may be taken together by agreement.

Amendments Nos. 36 and 37 relate to section 3. Could we reserve those for that section?

Is that agreed? Agreed.

I move amendment No. 12:

In page 6, subsection (3) (a), line 15, after "declaration" to insert "and audited accounts in respect of the relevant period or in the case of individuals where these are not appropriate other substantial documentary support".

In dealing with section 2 the key clause, and Deputy Yates is correct in this, is subsection (3) which sets out the procedure to be followed, that is, within a specified period the errant client arrives and gives a declaration in writing to the Chief Special Collector; it is made and signed by the individual in a form prescribed by the Revenue Commissioners and approved by the Minister and contains, in relation to the individual, a full and true statement of the respective amounts — the "declared amounts" under the Act. It also mentions income and chargeable gains. I presume the income includes levies also. The person declares that these amounts were not illegal. Subsection (4) states that: "On receipt by him of the declaration referred to in subsection (3) and the settlement amount, the Chief Special Collector shall give to the individual concerned. . . ." this certificate of immunity with all the powers attached to it.

My amendment seeks to insert after the word "declaration""and audited accounts in respect of the relevant period or in the case of individuals where these are not appropriate other substantial documentary support". I do not know why someone who is coming clean should have the slightest fear about backing up their declaration. The Minister says that is what they want to do. Their consciences have been at them, their families have been at them about the inheritance after they die and they now want to become good citizens, use the amnesty and come clean. Let them do so by producing documentary support for their declaration. That is the purpose of amendment No. 12.

Amendment No. 24 refers to the tailend of that section. Subsection (4) states that when this declaration and the settlement are given to the Chief Special Collector he shall give the certificate to the individual. My amendment seeks to provide that the Chief Special Collector may, if satisfied as to the accuracy of the aforementioned declaration and audited accounts or substantial documentary support, give to the individual concerned the certificate. The key feature of what I am saying is that the sine qua non of the operation of this declaration system for the errant client who wants to come and beat his breast before the special collection unit and say “mea culpa, I have sinned in the past but I want to be honest from now on” is support with documentary evidence.

If the Minister believes what he has been telling us is the actual intention of this section then he should accept the logic of amendment No. 12. I do not believe it should be a legal requirement that the chief special collector should, like some kind of Revenue eunuch, without any regard to the quality of the declaration or supporting evidence give a certificate just because someone turns up in the prescribed form, fills out the details and signs on the dotted line. That, too, is a flaw. There should be some right of review. The Minister's argument from the time he came in here today to try to defend this outrageous section in this outrageous legislation was that this is to help people who are on the outside to get back into the system; it is their last chance. Surely it is not too much to ask such a person to support their claim with documents or other proof. If the Revenue Commissioners are satisfied, they will get their certificate of immunity which can block out all sorts of future inquiries under section 5 but, if not, it should not be mandatory to issue a certificate. There is no discretion.

I hope the Minister accepts these amendments.

This is perhaps more important than section 3 and if we need an extra five minutes to deal with it we should take it. This is absolutely vital. The first principle of self-assessment is that one should produce documentary evidence to back up one's case. In amendments Nos. 19 and 20 I seek to have the declaration of income supported by the submission of full accounts for the relevant year together with computations of VAT and PAYE outstanding and the full payment and settlement of same. I think that is reasonable. It seems to me that the Minister is assuming that these people are honest. By definition, these people are dishonest. They have broken a variety of laws including the tax laws.

People think they bring home £100,000 and pay 15 per cent but that is not the case. If one is a publican, in order to have £100,000 one would have to suppress VAT sales and take cash out of the business. One would have suppressed one's profits and paid less income tax. One could put that money in a non resident account where it would earn interest without one paying DIRT. These are the three taxes they would have evaded. It would be very difficult to know exactly what one should have to pay. What we propose is that one meets this Trappist monk and works out what one owes because people might declare the full amount but not pay the correct tax. It is 15 per cent on one's income tax.

The Minister's presumption of honesty is wrong. I think we have clearly established that people will declare their worst case scenario for one year. A doctor has some discretion as regards giving certificates. There is always an element of discretion in the granting of any certificate, a new house grant certificate or whatever. This allows no discretion whatsoever. The special collector is obliged, even if he knows or believes that the claimant is telling bare-faced lies, to give him the certificate. Amendment No. 20 seeks to give the special collector an element of discretion based on whatever criteria would be laid down by the Minister or the Revenue Commissioners, to satisfy himself that the declaration is a full and total one. That is reasonable. If someone is making a clean breast of things and coming forward, then the Revenue Commissioners would be satisfied with that but how is one to determine exactly whether he is telling the truth? The only way one can establish that is if there are supporting accounts — they may have been concealed from the accountant — because anything else is a guess and it can be an overestimate or an underestimate.

This is fraught with dangers. It is utterly flawed in this respect. At a very minimum the declaration should be accompanied by some factual evidence and the claimant should have to verify that this is a total declaration of his earnings. That is the only way to do it. Anything else means that they will try to get away with paying the minimum amount and as the Minister's abiding principle on this is to get in the maximum amount of money, he should accept this amendment.

The Minister for Finance has done more to shut down some of the more obvious loopholes and tax shelters than any previous Minister for Finance. It is all the more regrettable that he is undermining the house he has built himself. This goes to the heart of the point because saying now that the tax inspector will have power to look at the 1992-93 returns and, therefore, catch out tax cheats does not hold water.

The Minister, on a couple of occasions today, remarked on something I believe to be the genesis of this amnesty. He said it is because the trap is about to close that we are having this amnesty. He said that it is because the system has greatly improved and the Revenue Commissioners are breathing down the necks of some of the most wealthy and, presumably, the most prestigious people in society. He did not make this connection and he does not need to do so but they have the ear of someone in high places and as a result they got an amnesty. Can you imagine a situation where a lowly tax inspector would start to probe the affairs of one of these people? As soon as he squeezes him wherever it hurts, what do you think he will do? If he could have the amnesty delivered for him in the first place he will certainly have enough clout to get the tax inspector off his back. I do not buy it.

It is a routine administrative requirement that documentary evidence be furnished with the statement and that should include audited accounts and whatever other documentary evidence the Revenue Commissioners may prescribe. That is the minimum required to assist the tax inspector in the year 1992-93 and subsequent years because otherwise he will not know where he is going. To suggest that the high and mighty and powerful in our society are going to be put off or tolerate a tax inspector breathing down their neck, having got away with what they have got away with here, is nonsense. This is crucial and central to the Bill. We cannot have a system whereby somebody can walk in to a person called a "special collector" and make a confession and say he is sorry for all his sins and has a firm purpose of amendment. The collector must accept without question what he is telling is the truth, he having told lies all his life by definition, and now suddenly he is converted on the road to Damascus.

We are very grateful for the money. Deputy Cox wants to devote it to the national debt. The national debt would not be in the mess it is in if these people were paying their fair share of tax in the first place.

Or capital projects.

Or capital projects. I would like to hear the Minister on it.

We went over much of this ground this morning. The object and purpose of these amendments is to try to get the chief collector to be provided with a declaration and full supporting accounts and have the computations for each year. The Deputies proposing the amendments require that the chief inspector satisfy himself on these matters. If the chief inspector were to do that he would have to satisfy himself that the detailed annual declarations were complete, that they were correct, that the income and gains disclosed did not arise from an illegal source and he would have to go through the full process. If he were to do all that there would be no point in having a chief inspector's office which is probably the purpose of the amendments. If that was done to a lesser extent all these amendments would remove an ingredient which the Government consider to be the key to this system, that is the ingredient of confidentiality.

We are talking here by and large about the two categories. There are the people who are outside the net altogether, who are not known and not sending in any returns so they probably have no tax advisers or accountants. We are trying to bring them in. They are in the system, they are operating, they have been there for years, they did not take into account the 1988 amnesty, they were not interested. They were not part of the 400 people who came into that amnesty from outside. There are other people who are sending in accounts, who are telling their own accountants and tax advisers that they are compliant but all the time are suppressing income. If individuals like that believe that they are going to be labelled and hounded by the Revenue Commissioners for evermore they will not come in at all.

It is standard practice.

It is not standard practice. Many of these people have remained safely outside for many years.

They are safe no longer and they know they are not safe.

That applies to some of them. With all the excellent Revenue work that I have spoken about all day yesterday and today, it so happens that there are still huge resources in the non-compliant area. The very fact that Members of this House were queueing at my door this morning with all kinds of cases on all kinds of people who have come under this amnesty proves that very point. They are not huge sharks. They are shopkeepers, small farmers, tradesmen, doctors, people within Irish society. Maybe they feel the house in Benidorm or the house in the Lake District of England or in the south of France is becoming dodgy and the Revenue Commissioners are closing in on them, but they have managed, in spite of everything, to circumvent the system. We are trying to create once and for all a compliant society. We are giving them the opportunity of coming into a system and staying in the system. Does anyone believe that non-compliant taxpayers are going to march with accounts into the Revenue Commissioners and pay all this money? Many of them will not have accounts because they have been tricking and fooling their own accountants and tax advisers. They will continue to be non-compliant taxpayers and next year they will cream off another £25,000 or £30,000 and slip it outside to one of the banks that makes the facilities for people to do business.


At least if we get them in and get 15 per cent of something it is better than 15 per cent of nothing. However, the key factor is not the money. We do not know what we will gain, but we get these people out of the net and out of the non-compliant area and into the compliant area and thereby make this a more tax compliant society.

The Minister says if it is necessary to get documentary or supporting evidence these people will not come in. What the Minister is offering in section 2 in respect of levies, income tax and capital gains is a once for all charge of 15 per cent, highly discriminatory against compliant taxpayers, highly arbitrary against the interest of compliant taxpayers, very much discriminating in favour of these people. The Minister is saying he will not even charge them the price of establishing the basis of the money. If they are getting the 15 per cent bargain right off, why should they not be asked to account for it? The Minister has said the Revenue Commissioners will use the 1992-93 declaration like a can opener to come back at them. Now he is telling us they will have no information, they never had any information. These people cod everybody up to the eyeballs. They will come into the system and declare it, having cheated their own accountants and advisers and everyone else involved in the system. The Minister asks us to believe that later on the Revenue Commissioners with their can opener will come around under some other section of this legislation and get at them. The Minister cannot believe what he is saying.

It is our very difficulty that the Deputy is highlighting and it is the point I made earlier. They will have to declare their undeclared liabilities up to April 1991.

With no supporting evidence.

With no supporting evidence, but that is the start. From there on they have to support their case and on their 1992-93 tax return. Probably they will be asked questions on their 1991-92 accounts as well. They are open to the full rigours of the tax audit.

On their terms.

Only on their terms for 30 days.

Only on their terms because the Minister has no documentary evidence against them.

Deputy Cox, allow the Minister to finish and then we will take Deputy Yates' amendment.

As soon as the 1992-93 tax form is put forward by them, and they get no gains under this amnesty unless they comply with the measure by 31 January next, they are open to the full rigours of the law. The Revenue Commissioners can then, if they so wish or if they believe the case does not stand up with the certificate put forward, ask any question, look for any documentation and all they have to do is prove that to the appeal commissioner. That will be quite easy to do if the tax certificate is not matching.

Is the Minister telling me that someone is going to incriminate himself in 1992-93 in such a stupid way, having used his intelligence to dodge everything that he was due to pay for a decade or two in advance? Of course he is not. When it goes to the appeal commissioner he will be met with the immunity certificate behind which he cannot go to get any support in documentary evidence to support or demolish the case being made.

The immunity certificate will protect them from nothing. If one goes to the appeal commissioner and the case does not stand up, if one cannot reconcile the figures with what is on the 1992-93 tax certificate, the Revenue Commissioners can then go behind the case.


One must ensure that the 1992-93 tax form complies with what is put on the certificate. If one cannot do that one has got only 30 days. The appeal commissioner hears the case and if he believes that there is a case to answer, the person does not get the benefit of the amnesty and is liable then for full liabilities, full taxes, full penalties.

If the immunity certificate has no worth why not delete it?


Will the Minister answer one specific question? Say, a doctor retired in 1991 and come forward under this amnesty and produced no accounts and no statement of earnings and just declared the figure of £100,000. He had retired in 1991 so there was no return of income for 1992-93. How would the Minister know without the documentary evidence whether he was telling the truth?

On the first question I would be very glad he came forward because if he was retired there would be no chance of getting him. I hope that all the people who retired in 1991 will come forward and pay up 15 per cent, otherwise we will never get the money. Once he comes forward he then has to comply, and if he complies we know how long he is in business, how long he is in practice, if he has property or a premises offshore. We have information which we would never have otherwise. We have no information on these people.

Is the Minister suggesting that a tax adviser, whom he has acknowledged those people will employ, who prepares the statement of self-declaration would then a couple of months later make a submission in respect of the 1992-93 returns of the person claiming the benefit of the amnesty and that somehow that return would be inconsistent with the statement of self-declaration? There is no tax adviser of any level of competence who would make a submission in respect of 1992-93 returns that would be found to be inconsistent with the self-declaration statement. The same person will draw up both and he will make sure that it is consistent. Therefore the tax inspector will have no cause to suspect.

The Minister has been claiming that the tax inspector may have reason to suspect that wrong information has been given, but how would he know? There is no way he could know. If there is no documentary evidence submitted with the self-declaration and there are no accounts, there is no documentary evidence of any kind.

We are not waiting for people to incriminate themselves. It would be unlikely that they would do that. It is the inspector of taxes' job and duty and it is with no fault and no favour. The Revenue Commissioners have proved in many cases, including the Donegal case, that they are prepared to take these things head on. If they can in late 1992-93, which is the first year they have a certificate, or any year thereafter form the basis of a case, they can go back to get their certificates, and that is precisely what they will do. A person who takes the benefit of the amnesty must ensure that he complies from now on. I think that person will do so. I do not believe people will take the benefit of the amnesty who have no intention of complying.

They will comply for the amount they declare.

That will be of no benefit to them. They will comply for the amount they put forward in their certificate to the special collector but then in their 1992-93 tax form they will go legitimate because if they do not they leave themselves open to the full rigours. That is what happened in the 1988 amnesty. People who had part of their funds non-compliant came in to be compliant and have more or less stayed in the system since 1988.

They will have a foot in both economies and the little certificate is worth gold. It is worth more than a medal from the Olympics because all one has to do is wave it at the tax inspector who then has to put his tail between his legs and head off back to Dublin Castle. It is an absolute road block. You cannot go any further.

If Deputy Rabbitte is wrong, get rid of section 5 because it makes no sense to issue the certificate.

The day he leaves the Castle or wherever with his certificate is the day that he starts being a compliant taxpayer. If he seeks not to be, he has no reason to go to the Castle in the first place.


Some people do not understand the powers and success of Revenue Commissioners audit systems and what we have done under self-assessment and other audit investigations over the last six to seven years.

Is the amendment being pressed?

I wish to withdraw the amendment.

Amendment, by leave, withdrawn.
Amendments Nos. 13 to 31, inclusive, not moved.
Question put: "That section 2 stand part of the Bill".
The Committee divided: Tá, 19; Níl, 11.

  • Ahern, Bertie.
  • Ahern, Michael.
  • Ahern, Noel.
  • Bree, Declan.
  • McDaid, Jim.
  • Ellis, John.
  • Ferris, Michael.
  • Killeen, Tony.
  • Foley, Denis.
  • Fitzgerald, Brian.
  • Moffat, Tom.
  • Morley, P. J.
  • O Cúiv, Éamon
  • O’Keeffe, Ned.
  • O’Leary, John.
  • Penrose, Willie.
  • Smith, Brendan.
  • Upton, Pat.
  • Walsh, Eamonn.


  • Crawford, Seymour.
  • Bradford, Paul.
  • Finucane, Michael.
  • Browne, John (Carlow-Kilkenny).
  • Keogh, Helen.
  • Cox, Pat.
  • McGrath, Paul.
  • Fitzgerald, Frances.
  • Nealon, Ted.
  • Rabbite, Pat.
  • Yates, Ivan.
Question declared carried.