Since our first inquiries into the banks and the DIRT issue, this committee has given total backing and support to the Revenue Commissioners. We asked Mr. Quigley and other predecessors of Mr. Daly whether additional powers were required, and where they were, we recommended that they be granted. At the same time, we have expressed concerns about the treatment of particular categories of persons, for example, the elderly and widows. I was also concerned about the advertisement run by the Revenue Commissioners. I am aware that Mr. Daly responded to some of the concerns expressed by stating that Revenue did not send out any letters. However, the advertisement was very stark, with a gentleman, whom I mistook for Mr. Daly, standing with a letter in his hand and the message and tone seemed to be one of "We will get you". I was concerned about that aspect and I drew it to the attention of those in the House who would have had some input in this area because it was different to the approach adopted by Revenue up to now.
In that context, I am concerned about the individual who may have paid Revenue €32 and for whom that cheque caused a lot of concern and worry. There are many legitimate cases of people who had no tax liability. People approached me and I had to carefully explain to them, despite the advertisements, that buying one-off insurance premia is a legitimate practice. The message that people received was the opposite to that. Letters were sent by advisers and those working in the financial area, who possibly created some of the trouble initially. Nonetheless, there was major concern and Mr. Daly must accept that.
Deputy McGuinness referred to the fact that we are dealing with a changed culture in the area of finance, particularly in the last ten years. One area that has been brought to my attention by various legal representatives concerns people in their late 80s or 90s, often widows, who had no idea what financial transactions were carried out on behalf of their households and who are now very concerned. In many cases, these people simply do not know from where money came.
The positive aspect of this, despite the concerns of Deputy Joe Higgins, was the balanced decision to use €20,000 as the cut-off point. While I take his point that a policy might be worth €40,000 now if an individual invested in the 1980s, the approach taken by Revenue was sensible and practical in this regard. Had the cut-off point been lower, more people would have been dragged into the net and that would not be beneficial, even from the point of view of Revenue, in the sense that it would be receiving more cheques for €20 or €32.
I do not believe that any member of this committee would have sympathy for the person who is obliged to pay €3 million, which is the higher limit and the figure that will be quoted. However, we have major concerns about many of the people down the line. I am particularly concerned about the large tranche of people who have no liability but who are still worried. The Revenue Commissioners advised people that there was no need to engage tax advisers but people had seen what happened in the DIRT enquiry, where individuals who were not in big business were penalised and therefore they had major concerns. I am not exaggerating here and many of the people to whom I am referring have no tax liability.
Does the Revenue have any way of teasing out the 700,000 life assurance policies? I appreciate there will be multiples within that total, with some people having four or five different policies. If we are advertising the fact that 2,000 people have a problem and that 10,000 people have written to Revenue to declare that they may have a tax issue, we should make some attempt to tell the legitimate policy holders, who may number 90,000, that they have no tax difficulties. Many members of the committee received letters about this matter. People working for the committee had to ask themselves whether their affairs were in order. People had worries in this regard and the Revenue should bear such people in mind.
I agree with Deputy Michael Smith that the perception exists that people who had hot money are untouchable. The numbers of such people have probably reduced in the last five years, but it was a big issue in the early 1990s and following the DIRT inquiry. There was a time when I, as a PAYE worker, paid 67% tax, with nine to feed from the remaining 33% of my income and it is galling to think that hot money was being thrown around. The perception is that certain people are untouchable, that they are like the banks. I appreciate the difficulties, as outlined by Mr. Daly, in securing prosecutions but nonetheless the perception persists that they are untouchable. Furthermore, the belief is that the bigger the company, the less likely that action will be taken against it by Revenue.
I welcome the changes introduced by the Minister for Finance, Deputy Cowen, but financial experts may well be unconcerned by them because those to whom they gave financial advice are paying fines and bearing the costs of illegal activity. The advisers are simply warned that if they behave in the same manner in the future, they will be penalised. As politicians, we have difficulties explaining that to the general public.
I would like the Revenue to send a message of reassurance to the compliant taxpayer, who always worries. Around the world, people worry about revenue commissioners. In the United States, I believe, you can take out insurance against revenue-related worry. The reassurance should contain information which indicates that approximately 90,000 people have nothing to worry about. People are still concerned about this issue, even though the deadline for disclosure has passed.
I wish the Revenue Commissioners well in their work. This committee has always encouraged Revenue, even if Deputy Joe Higgins takes a different view to mine. Nonetheless, if everybody had paid their fair share of tax, we would not have had a tax rate of over 50% in the 1980s. When the former Minister for Finance, Mr. McCreevy, cut capital gains tax from 40% to20%, the yield doubled. People became more compliant and were willing to do business with Revenue. Therefore, it was necessary to do such things and I welcome many of the changes that have been introduced. I am concerned, however, that people who took advice from professionals are penalised, while those who gave them bad advice are not. I am referring particularly to people in their 80s and 90s, often widows, who would not have conducted their own financial transactions.
Some elderly people expect to get money back from the State because of the illegal nursing home charges but I am concerned that we may be doing the opposite here, that is, that we will be chasing people who cannot pay. I am not asking that the rules be changed so that everyone over 65 is exempt. I agree with the approach of the Revenue and the Minister for Finance in that regard. However, I am concerned. I hope that the 19,000 callers to Revenue were reassured but there is still a large number of people who have some element of concern and the sooner we can set their minds at rest, the better.