Tuesday, 1 February 2005
Question 8: To ask the Minister for Finance if his attention has been drawn to comments made by a person (details supplied) in which it was suggested that the law should be changed to make it an offence for anyone to take steps to facilitate the fraudulent evasion of tax; if he intends to act on this suggestion; and if he will make a statement on the matter. [2474/05]
I am aware of the difficulties the Revenue Commissioners experience when attempting to prosecute persons who collude in or facilitate tax evasion. This has been raised at the Committee of Public Accounts and in the media. I have considered this matter in the context of the Finance Bill, which will be published later this week. It would not be appropriate for me to comment further in advance of the publication of the Bill.
Does the Minister agree that tax evasion is a crime? It can be a significant one against society when money that would otherwise be available for important areas such as health and education does not become available. Is the Minister bearing in mind the Revenue Commissioners' finding that legislation on tax evasion makes any prosecutions in the area difficult? Is the Minister aware that bank officials or senior management who organised, perpetrated and facilitated multi-billion euro of offshore tax evasion have not been prosecuted? Compare this with people on social welfare who are frequently, and correctly prosecuted for defrauding the social welfare system.
The question of revenue law assisting the Revenue Commissioners is under consideration in my Department on foot of representations by the Chairman of the Revenue Commissioners. I have sought the advice of the Attorney General's office and I will make an announcement on this matter when the Finance Bill is published on Thursday.
Is the question of evidence the real problem? In the NIB case, substantial tax evasion schemes were identified. While the taxpayers paid, the bank suffered no financial penalty for the tax evaded. Is there a problem with evidence requirements or penalties? Will the Minister inform us where the problem lies with this issue? People feel this is a serious source of scandal.
The current legislative provision covers the offence of assisting someone in making an incorrect return. This narrowly defined offence is specific. To address this difficulty a new offence of facilitating tax evasion, along similar lines to the recently enacted criminal justice legislation and the UK model would have to be considered. These are matters on which I have taken advice and I will comment on them when I publish the Finance Bill on Thursday.
Will a distinction be made in the legislation between the people who deal face to face with bank officials who may have given direct advice and senior management in financial institutions who would have been responsible for what was often an unspoken policy that would have encouraged tax evasion? Is the Minister aware of that distinction and will he make provision for it?
The legislative base is rather narrow and restrictive. The creation of an offence regarding aiding and abetting of tax evasion is a matter on which I have taken advice. I cannot comment further on the matter until Thursday.
Will the legislation include an offence of aiding and abetting putting money offshore for the purposes of tax evasion? I understand that is the difficult point. Did the Minister receive representations from commercial or banking interests or the tax advisory industry regarding this matter?