Ms Josephine Feehily:

The short answer is that they are dealt with in the same way as everybody else. The initiative which attracted attention last year is one I have taken on a number of occasions. I have written to the Secretaries General a number of times - as a service, not as a threat - and the third time happened to be in the middle of last year. There are many new Secretaries General and agency heads. A couple of years ago legislation was introduced which requires all public bodies to report all payments to us - automatically and electronically - for risk analysis purposes. The context to my communication was to remind people of the range of taxes that impact on public bodies. I would have written to them and stated that they needed to be aware of all of those taxes and that the payment of VAT and RCT can arise. There were some who were of the view that said payment did not arise. Many public bodies do not use tax advisers. In that context, this was a customer service initiative on my part which ended up being seen in the opposite way. I was drawing their attention to the range of taxes which apply and the circumstances in which they are payable by public bodies and asking them to pass the information I was imparting down through their systems to their agencies.

There is a code of practice for the governance of State bodies. I am kind of hot on governance. I have given this speech at a number of venues and not just to State bodies. I am of the view that tax is a governance issue which should be dealt with by boards. The latter should pay attention to it and State boards are no different. I would probably have written that in the letter as well. As already stated, there is a code of practice for State bodies which requires them to be tax compliant but also to stand off of aggressive tax planning. I would simply have drawn their attention to the existing code of practice. If I wanted to inform a public body that I believed it was engaging in aggressive tax planning, I would write a different kind of letter and send it directly to that body. In addition, I would not discuss the matter with the committee because it would be subject to taxpayer confidentiality. It was a general informational piece.