Dáil Éireann díospóireacht -
Wednesday, 18 Oct 2000

Vol. 524 No. 3

Written Answers. - Tax Evasion.

Austin Deasy

Ceist:

127 Mr. Deasy asked the Minister for Finance the maximum penalties applicable for tax evasion and tax fraud; and if he has satisfied himself that the authorities are pursuing the perpetrators of such offences in a sufficiently diligent manner. [22685/00]

Minister for Finance (Mr. McCreevy)

I am advised by the Revenue Commissioners that penalties for tax evasion and-or tax fraud may be applied either by way of civil or criminal proceedings.

In the case of civil penalties, the tax code provides for a range of maximum penalties, depending on the tax and the nature of the default. In evasion cases involving the fraudulent or negligent making of a return, the maximum penalty which generally applies is:

(i)£100, and

(ii)the amount or, in the case of fraud, twice the amount of the tax evaded.

In some instances fixed monetary sums apply.

In the case of criminal offences the maximum penalties generally are as follows:

(i)on summary conviction, a maximum fine of £1,000 or imprisonment for a term not exceeding 12 months or both,

or

(ii)on conviction on indictment, a fine not exceeding £100,000 – £10,000 to 24 March 1999 – or, at the discretion of the court, imprisonment for a term not exceeding five years or to both the fine and the imprisonment.

In the case of false statements made to obtain an allowance, the maximum penalty on conviction on indictment for an offence is a fine not exceeding twice the amount of tax evaded and a term of imprisonment not exceeding eight years.

Where serious tax evasion occurs Revenue has a policy of considering the possibility of initiating a criminal prosecution. Because of the heavy burden of proof involved and the resources required such prosecution is, of necessity, pursued on a selective basis for cases with the best chance of success.

Since April 1997, 11 criminal prosecutions for Revenue offences have been completed in the courts. In three cases, prison sentences were imposed. In two of these cases the sentences were suspended, while in the third a custodial sentence of two years was imposed. In seven cases, fines were imposed and in one case the two accused persons were acquitted after legal argument. There are at present 32 cases at various stages of investigation or preparation for the Director of Public Prosecutions and a further five cases are before the courts.

Where a criminal prosecution or civil penalties are not pursued through the courts Revenue will deal with the matter by a monetary settlement involving payment of tax, interest and penalties as appropriate. Publication of the tax defaulter's name also takes place in accordance with the legal provisions.

Revenue's general strategy is set out in its statement of strategy 1999-2000. While the pursuit of individual cases is a matter for the Revenue Commissioners I am satisfied with the overall approach which the commissioners have adopted. The Deputy will, however, be aware that the operations of the Revenue Commissioners, including their approach to investigation and prosecution, have recently been reviewed by my Department. The report of the steering group on the review has been published and placed in the Oireachtas Library. This report will be discussed shortly by the Committee of Public Accounts.