Michael Noonan (Limerick City, Fine Gael) | Oireachtas source

The Deputy is missing the point that tax avoidance is not illegal. These people are involved in tax avoidance schemes. They are not involved in tax evasion schemes. In several cases the Revenue Commissioners have challenged the legality of tax avoidance schemes. The people involved in the tax avoidance schemes are prepared to take the Revenue Commissioners to court to prove that the tax avoidance schemes were legitimate and will pursue it all the way to the Supreme Court. The Revenue Commissioners can do that and risk losing, taking the expense and opening a gap in the code or they can ask these people if they really want to go all the way to the Supreme Court and try to incentivise them to come out with their hands up and admit that their tax avoidance scheme was not kosher, pay all the tax they avoided and 80% of the interest and settle on that basis. There is a queue of them challenging in court. It is the advice of the Revenue Commissioners that this is a better way for them to do business and is more likely to end with revenue for the Exchequer than to pursue the matter in court with the possibility of losing key cases and opening gaps in the tax code which others could use to avoid taxes until we could close those gaps, which cannot always happen overnight.

It is not tax evasion or incentivising people guilty of a criminal offence. It is moving to close tax avoidance schemes where the Revenue Commissioners have a very strong opinion that a scheme is not in accordance with the law. A major part of the problem we are trying to deal with is that cases can take years to process through the courts. There is massive expense. When cases have been processed, the Revenue Commissioners often find there are no assets left to pay the tax by the time they get a court adjudication. If they go after everything, they can end up with nothing, even if they win the case. It is not a wish to be soft on those who avoid tax. This is purely to get the best result in the country’s interest.