Joan Burton (Dublin West, Labour)
Link to this: Individually | In context | Oireachtas source

The recently released Paradise Papers and, before them, the Panama Papers tell a shocking story of the world's wealthiest companies and individuals using secretive offshore tax havens to shelter their wealth from the legitimate tax demands of tax authorities across the world. Ireland's name features in all this, which, like Robin Hood in reverse, seeks to rob the poor, the working class and the middle class to create a tax-free globe for the rich and mighty, both corporate and personal. The newspapers, including The Irish Timesand The Guardian in the UK, that have supported the International Consortium of Investigative Journalists, ICIJ, in publishing this information are to be congratulated even if what they have to say is disturbing.

The Paradise Papers and Panama Papers show that these arrangements and structures are the enemy of a flourishing, open democracy. The secrecy that is the core asset and principle of tax havens, as well as their no-tax status, is the greatest threat to countries such as Ireland and other EU member states. It is also probably a critical factor in the creation of a global elite of oligarchs, billionaires, multimillionaires and companies that are outside of normal taxation. This is one of the scandals of our age. Its consequences in terms of undermining the kind of open and flourishing democracy that we all aspire to are frightening.

What is the Minister going to do about this in terms of Ireland's reputation, which risks being shredded, and what actions will he take? When I was a member of the previous Government, the Labour Party in particular sought to include Ireland fully in the OECD process. That stands to us now as we face the difficulties of Brexit. However, I hear a deafening silence from Fine Gael in particular, but also from the Independent Alliance, regarding the scandal of international taxation.

Multimillionaires in Ireland can park their recently-purchased jets for an hour or two in the Isle of Man, thereby cheating the Revenue and Irish taxpayer of the VAT that would be due on such a luxury product, and the Minister has his hands up and open and has nothing to say about it. I realise the Minister of State who is to respond is not personally in charge of this area but all I can say is that we are fooling ourselves.

As the United Kingdom is leaving the European Union, we must address this area. We only want people to pay their fair share of taxation. We do not want particularly punitive tax rates. Why are people in ordinary jobs in Ireland, including civil and public servants and those in private businesses, paying quite a lot of tax while other people are flying in on jets or sailing in on yachts, having spent two hours in the Isle of Man? They are not even contributing VAT.

Patrick O'Donovan (Limerick County, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I am taking this issue on behalf of my colleague, the Minister for Finance and for Public Expenditure and Reform, Deputy Donohoe. The Minister is aware of the publication by media outlets of information deriving from the Paradise Papers. The Paradise Papers are not currently publically available but the International Consortium of Investigative Journalists, ICIJ, has indicated that it intends to release them in the coming weeks.

To the extent that these or any similar papers identify individuals or entities associated with Ireland, Revenue will examine the cases and intervene as appropriate. At an international level, Revenue will also work in close co-operation with other tax administrations within the framework of the OECD’s Joint International Taskforce on Shared Intelligence and Collaboration, in addressing issues raised by the papers and will, as appropriate, share information under existing legal frameworks. The Minister for Finance has confidence that any issues of concern will be investigated by the Revenue Commissioners, as appropriate, as soon as the papers become available.

On the media references to the Irish banks, as the Deputy is aware the Minister for Finance has no direct function in strategic or operational decisions made by the banks in which the State is a shareholder. Decisions in this regard are the responsibility of the board and management of each institution, under the supervision of their regulator and equivalent authorities in the jurisdictions relevant to their operations. The Minister must ensure that the bank is run on a commercial and independent basis and in this regard a relationship framework has been specified that defines the nature of the relationship between the Minister for Finance and the bank. As the Deputy is aware, these frameworks can be found on the Department of Finance website.

The Deputy will be aware that AIB has indicated it does not support or facilitate tax evasion and acts in accordance with all relevant tax and data protection laws in any jurisdiction in which it operates. Under the terms of its EU restructuring plan, AIB was tasked with becoming a simpler, smaller and more domestically-focused banking group, to ensure its stability and return to viability. AIB previously had banking operations in many jurisdictions around the world and provided a range of standard banking services to its international customers. As part of the EU restructuring plan commitments, the bank made the decision to dispose of some of these operations, such as its Polish subsidiary, and close others, which included the winding down of their operations in the Isle of Man and Jersey. The bank has confirmed to the Minister for Finance that it was decided to wind down AIB ISL Limited in the Isle of Man and AIB (CI) Limited in Jersey in 2012 and they ceased operations on 31 December 2013. The banking licence of both companies was terminated and the administration of both, which is a legal and regulatory requirement as part of the orderly wind-down of the banking operations, was migrated to and continues to be carried out by two companies, namely, Estera Trust (Isle of Man) Limited and Estera Trust (Jersey) Limited. The bank has also advised the Minister that it fully complied with a series of disclosure orders made by the High Court In Dublin between 2004 and 2012 in favour of the Revenue Commissioners in respect of information held by the bank’s Irish operations as part of Revenue’s offshore products investigation.

Bank of Ireland has advised the Minister for Finance that it is its group’s policy to fully comply with all the requirements as set out in tax legislation in the countries in which it operates. The group is also committed to maintaining open and co-operative relationships with the relevant tax authorities in the jurisdictions in which it operates. To this end, the bank has informed the Minister for Finance that the group has signed up to and operates within the co-operative compliance framework with the Revenue Commissioners and the equivalent banking code of practice on taxation with the UK's HM Revenue and Customs. The group closed the last of its retail operations in the Channel Islands in June 2014 following a general business review.

Significant action has been taken, in Ireland and internationally, in respect of offshore activity in recent years. Revenue originally launched an investigation into offshore activity in 2003 and has collected more than €1 billion in tax, interest and penalties to date as part of this investigation. Changes were also made in 2016 to the voluntary disclosure tax regime. Since that change, the Minister for Finance is advised by Revenue that the number of disclosures exceeds 2,700, with a value of more than €80 million. As already noted, as soon as any information becomes available it will be closely examined by the Revenue Commissioners.

Joan Burton (Dublin West, Labour)
Link to this: Individually | In context | Oireachtas source

I do not know that there is anything new in what the Minister of State has said. I would like to know what new demands, if any, the Minister for Finance has made in respect of the banks since the publication of this information. I refer in particular to those banks which were bailed out at a significant and continuing cost to Irish taxpayers. Was any new initiative undertaken as a consequence of the publication? Has any squad been assembled in the Revenue Commissioners or the Office of the Director of Corporate Enforcement, ODCE, to ensure that what the banks say they are doing has actually been carried out? Will the Minister commit to a full Dáil debate before the Christmas recess on this matter? I appreciate that the Minister may not have all of the data until everything has been published.

We already see too many Irish-based organisations, companies, individuals and so on popping up in the reports which have been released on a daily basis by the Irish media, in particular The Irish Times, as well as by TheGuardianin the UK. Is the Department monitoring those reports? Is it examining the status of individuals and transactions which have been identified? Will the Minister commit to continuous reform of the structure of tax inquiry and monitoring in order to catch up with this brave new world of global financial organisation and tax evasion and avoidance? It is happening on a global basis and is outside the reach of almost every country.

I have repeatedly recommended a standing tax commission in Ireland which would enable the Revenue Commissioners to do this on a continuous basis. Can the Minister of State tell us about the yachts and private aircraft, which rest for a couple of hours in the Isle of Man, directly across from Dundalk? Can he tell us what the heck is going on?

Patrick O'Donovan (Limerick County, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Minister asked that I reiterate that the sooner the ICIJ makes the papers publicly available, the better. Revenue has already spoken to the Minister. As far as I know, the Minister was with the finance committee and said he discussed this matter with the chairman of the Revenue Commissioners. The Chairman of the Revenue Commissioners has assured the Minister that as soon as the papers become publicly available and the revelations which are currently circulating in the media are published, Revenue stands ready to investigate them.

Everybody in the House would agree that the Minister for Finance and for Public Expenditure and Reform will not and has not been found wanting in respect of issues in the past. We do not have evidence that significant issues affecting Revenue will arise but if they do when the papers are published, the Minister has committed to dealing with them. He will not be found wanting on the issue.

As he stated in the reply I have given to the House, the sooner these papers are published and made available the better because it will allow Revenue and other tax authorities around the world, with which we will co-operate, to act. As I stated, it is in Ireland's interests to have as clean a reputation as possible.

6 o’clock

We have no interest in having a question mark over our reputation and it is certainly not the way the Revenue Commissioners operate. Deputy Burton was a Minister and knows it is in Ireland's best interest to continue to have an intact and good reputation. This Government and its predecessor has taken any necessary steps in our tax code to ensure our reputation is maintained. I have no doubt the Minister, Deputy Donohoe, is prepared to continue that process. I encourage the House to give its co-operation in this respect.