Brian Lenihan Jnr (Dublin West, Fianna Fail)

I note Deputy Morgan's comments and I assure him that the Commission on Taxation will deal this matter. We could assist the public by being factual in our assertions with regard to it. In that context, if one earns income in Ireland, one pays tax on it. If, however, one does not reside in Ireland, one does not pay tax on income one earns elsewhere. There is nothing unusual in that legal arrangement. It appears to be a feature of this debate for people to suggest that Ireland is somehow out of line or unusual in the context of the arrangements that are in place here. Those arrangements are almost identical to those which obtain in the United Kingdom.

If Deputy Morgan has evidence that a particular individual is living here more than half the year and is not paying the full tax on his or her income around the world, he can put the Revenue Commissioners in possession of that information in order that they might investigate the matter. Everyone is aware that the Revenue Commissioners have extensive access to information relating to particular taxpayers. It is open to the Deputy to do as he sees fit in respect of this matter.

It is useful to have a public debate on this issue. However, we must have a peg on which we might hang a particular person. We cannot simply say that because he or she was originally a citizen of this country and has now made a great deal of money through his or her business dealings across the globe, he or she must pay tax here on his or her entire income.

There are two countries which employ citizenship as a basis for taxation, namely, the United States and Eritrea. It is fair to ask why we could not use citizenship rather than residence as the basis of our taxation system. One reason is that attempting to link liability to income tax with citizenship is totally out of line with the normal practice in OECD countries - most of which are our neighbours - where tax liability is based on residence and not on citizenship. It is desirable, as a matter of general course, to have a similarity of treatment with one's neighbours in respect of an international matter of this nature.

A specific difficulty would arise in the Irish context if citizenship were to be employed as the basis of taxation because there is a very extensive access to citizenship in this country. As Deputies are aware, citizenship of Ireland is obtained by birth or descent or through marriage or naturalisation. These are the general categories that apply. The extensive access to Irish citizenship for those who do not live here is part of our history of migration to other parts of the world. Very few countries outside Ireland recognise the right to a grandchild to obtain citizenship. In addition, and as I am sure Deputy Morgan is well aware, we have always attributed citizenship throughout the territory of the island of Ireland on an equal basis. Were we to decide to impose taxation on the basis of citizenship - I do not wish to rake over old embers here - we would be obliged to send tax return forms to virtually every resident of Northern Ireland.

In his amendment, Deputy Morgan seeks to narrow the position by including a stipulation with regard to people relying on their Irish passports. A passport, which is issued by the Minister for Foreign Affairs, is only evidence of identification of citizenship. It does not represent a person's citizenship but it is a sign that he or she has committed himself or herself to being protected by the State. Ireland has an extremely large number of passport holders, namely, 4.3 million, which is more than the population of the State.

It is worth noting that under the nationality and citizenship legislation, the individual has a right of renunciation of citizenship. Any Irish citizen is free to apply to the Minister for Justice, Equality and Law Reform to renounce his or her citizenship. It is true that the Oireachtas could suspend that right in order that military conscription could take place. In general, however, there is a facility whereby citizens may apply to the Minister for Justice, Equality and Law Reform to renounce their citizenship and they must act in good faith in respect of this facility.

Even if one negotiates the practical hurdle of sending tax forms to everyone in Northern Ireland and then assesses the tax position of other Irish citizens living abroad, one is still left with the fact that a person can renounce his or her Irish citizenship. The reason the United States is able to base its taxation system on citizenship is that it is such a powerful country. We do not possess an equal level of power. I note that Eritrea has followed the US example but it is the only tax-collecting country to have done so. We base our system on residence because that is what our neighbours do. That is why people move back and forth.

As I informed Deputy Burton in respect of an earlier amendment, there are two areas in respect of which the concerns that exist might be addressed. The first is that the Revenue should police the provision that is already in place. I am satisfied that it does so. The second is whether greater international efforts can be made to outlaw, on a mutual basis, places which sell tax residencies at a discount, for a premium or whatever. There is no other solution because the facts of residence and non-residence are incontrovertible.

Constant reference is made to individuals who are prominent here in respect of this matter. I am not sure of the identities of these people but the implication is that they are very generous with particular charities or may be active in sporting life. There are a number of individuals who are Irish and who are prominent here but who maintain that they live abroad. If there is any evidence in the possession of Deputies that the people to whom I refer do not live abroad, it should be placed in the hands of the Revenue Commissioners.

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