Dáil Éireann díospóireacht -
Tuesday, 3 Mar 1998

Vol. 488 No. 1

Written Answers - National Irish Bank.

Breeda Moynihan-Cronin

Ceist:

62 Mrs. B. Moynihan-Cronin asked the Minister for Finance if he has received a report or an interim report from the Central Bank or the Revenue Commissioners on the inquiry into the sale of certain financial products by or on behalf of National Irish Bank; and if he proposes to publish part or all of this report or interim report. [5564/98]

Pat Rabbitte

Ceist:

72 Mr. Rabbitte asked the Minister for Finance the preliminary report, if any, he has received from the Revenue Commissioners or the Central Bank on their investigations into allegations of tax evasion in connection with the sale of insurance products through National Irish Bank; the results of these investigations; the action, if any, he intends to take arising from them; and if he will make a statement on the matter. [5531/98]

Minister for Finance (Mr. McCreevy)

I propose to take Questions Nos. 62 and 72 together.

As I have already indicated in reply to an earlier question from Deputy Deenihan, information on the marketing of particular financial products would reside, if at all, with the Central Bank, and, in the case of tax evasion, with the Revenue Commissioners, in so far as such data comes to their attention in the course of their operations. On 26 January 1998, I wrote to the Governor of the Central Bank requesting that he clarify the position in so far as it might relate to exchange controls. I also asked him to report to me separately on the implications, if any, for all aspects of banking supervision. The Governor responded to me on 28 January to the effect that he is having these issues investigated and will report to me as soon as possible. To date, I have not received an interim or preliminary report. As the Deputies are well aware, the examination and pursuit of particular tax cases is a matter for the Revenue Commissioners. This is the position which has applied, and has been accepted in the House, since the foundation of the State. The Minister for Finance does not get involved in individual cases. I understand, however, that the investigations are proceeding as a matter of priority and I can assure the House on that point. The question of publishing a report does not arise, therefore, at this time.

As I have made clear on a number of occasions, I have asked the Revenue Commissioners and my Department to review the adequacy of the Revenue Commissioners' powers following the report of the McCracken tribunal. I have also said that if additional powers are shown to be desirable and likely to be effective, then proposals to enhance the Revenue Commissioners' powers will be brought forward. However, before taking such an initiative, it will be necessary to have all the relevant information from the series of inquiries currently under way. Indeed the Moriarty tribunal is specifically charged with making recommendations in the areas of banking supervision, the protection of the revenues of the State and offshore accounts.

Nonetheless, for the benefit of the House, I would not, if they were shown to be necessary, rule out new provisions, for example, to require financial institutions to report to the Revenue Commissioners where they become aware that financial products sold by them may facilitate tax evasion; or to notify the Revenue Commissioners where funds have been transferred in certain circumstances to or from particular offshore locations. There might also be new powers to the Revenue Commissioners to access bank accounts where there are reasonable grounds to believe that certain accounts are, or may be used, in a tax evasion scheme.

Any such proposals would need to be very carefully gone into to ensure that they would be effective, could not be easily circumvented, would not needlessly disrupt the affairs of law-abiding taxpayers and would be proportionate in their effect on the financial sector when measured against the problem to be tackled.

Any responsible Government would need to have as much information as possible by way of answer to these issues before it acted. That is why I have taken the approach I have. Caution and care should not be confused with indifference or indolence in these matters. The Opposition seems to want to rush in with unspecified and unlimited powers. I have to take a more responsible approach — one which, at the end of the day, will better secure the welfare of the ordinary citizen of this State and its revenues.

There should be no doubt about the Government's determination to combat tax evasion and avoidance. The 1998 Finance Bill contains a number of new provisions for this purpose and I have made further announcements at the weekend to clamp down on new avoidance schemes. I will not hesitate to take further action as the need arises whether as regards increasing the powers of the Revenue Commissioners or implementing other measures that are likely to be effective.