Dáil Éireann Debate, Tuesday - 26 March 2013
223. Deputy Pearse Doherty asked the Minister for Finance if he will provide his assessment of the plans by the British government and its Chancellor of the Exchequer to name and shame promoters of tax avoidance schemes; if he has any plans to introduce a similar practice here; and if he will make a statement on the matter. [15184/13]
View answerI understand that the UK Chancellor of the Exchequer, in the context of a range of anti-avoidance measures announced in his recent Budget Statement, indicated that it is the intention of the Government to undertake, through HMRC, a consultation process during the summer in respect of a package of information powers, penalties and other measures including the possible use of “naming and shaming” for tackling the behaviour of high-risk promoters of tax avoidance schemes.
As the specific details of the proposed measures and how they might impact, will not become available until such time as the consultation process gets underway, it is difficult to give any kind of meaningful assessment of a naming and shaming approach at this stage. Clearly, any final decision to go ahead with such a policy, and the parameters that would attach to it, will be informed by the consultation process itself.
Tackling tax avoidance is an inherently difficult problem because, in reality, it is a symptom of the tax system that we have. So long as there are boundaries in the system, tax advisors and taxpayers will seek to exploit those boundaries. Difficult and all as the challenge is, however, it is a challenge that has to be met because aggressive tax avoidance distorts markets, is economically unproductive and breaks the fundamental link between economic productivity and reward. It also, of course, threatens Exchequer tax yields and the perceived fairness of the tax system. In the current economic climate when many individuals are losing their jobs, facing significant cutbacks in pay and welfare provisions and increases in taxes, it is particularly invidious.
I have noted with interest the Chancellor’s plans in this area. I am informed by the Revenue Commissioners that they closely monitor international trends in relation to tax avoidance and aggressive tax planning, particularly in relation to the UK. They also study steps taken by Her Majesty’s Revenue and Customs to counter tax avoidance.
Over the last number of years acting on proposals from Revenue, myself and my predecessors have introduced specific anti-avoidance provisions in addition to developing our general anti-avoidance legislation including provisions in relation to mandatory disclosure. It should be noted that Ireland was one of the first OECD countries to introduce a General Anti-Avoidance law and the UK authorities are now about to implement such a provision. In addition, Ireland has had for many years legislation providing for the publication of the names of tax defaulters – something which the UK has recently introduced.
Revenue will closely monitor the UK consultation process and the outcome of that process with a view to assessing if a naming and shaming policy might enhance our fight against the promoters of aggressive tax avoidance schemes. It should be borne in mind that this is a complex area involving issues such as legal professional privilege that requires careful consideration.
In summary, while I have no plans to introduce a naming and shaming practice at this time, I retain an open mind on the issue and if, in due course, Revenue were to recommend such a course of action I will give it due consideration at that time.
