Liam Fitzgerald (Fianna Fail)

I second the Government amendment to the motion.

The motion measures success and effectiveness in the enforcement of the tax laws solely in terms of the number of criminal convictions secured on the basis of those laws and the 1993 tax amnesty. To be fair to Senator McDowell, in the course of his contribution he covered a much wider area. However, I must interpret the motion on the basis of its text. The motion calls for the transfer of responsibility for the prosecution of offences to a body other than the Revenue Commissioners. While his analysis of that was quite reasonable, Senator McDowell did not justify the proposal to transfer jurisdiction in these matters. The proposal has echoes of a recent proposal to transfer powers to deal with institutionalised child abuse from the Department of Education and Science to the Department of the Taoiseach.

One is tempted to ask if we are witnessing the emergence of a pattern whereby people who put forward arguments which do not seem to be cogent are tempted to propose that responsibility for the matter under discussion should be transferred to another agency to let someone else deal with it. I do not accept the validity of that argument. I apologise to Senator Higgins as it is my own fault I could not hear him. While Senator McDowell's arguments were very balanced, I do not accept that the logical conclusion is that there is clear justification for transferring those powers. I would not like to see that tactic becoming pervasive in the Houses of the Oireachtas. It would take from the reasoned exchanges of which Senator McDowell is more than capable. He does not need me to tell him that.

The Government amendment is a clear acknowledgement that we have had a problem of tax evasion for many years. It is still with us as Senator Mansergh pointed out. It is being dealt with although it is a long way from being fully addressed. The amendment further acknowledges that the powers and resources available to the Revenue Commissioners must be reviewed constantly and increased as appropriate. As the evidence shows, the Government has assiduously set about that task since 1997. That cannot be contradicted. The work the Government has done and its initiatives have had significant and growing success which has been acknowledged by all sides this evening. Major changes have been made to the powers of the Revenue Commissioners, the most significant of which were introduced in the Finance Act 1999. It must be acknowledged that the capacity of Revenue to investigate tax evasion has been substantially improved.

Some of the most significant changes in the 1999 Act related to financial institutions and the taxpayers' information which they held. Among other measures, the Revenue Commissioners were given powers to carry out on-site audits of banks whereas previously they were prohibited from entering bank premises. They were also given powers to carry out proper audits of DIRT returns by getting behind non-resident declarations to check their bona fides. This was unheard of up to that time. The Revenue Commissioners were given powers of access to bank accounts of named taxpayers and to a class of unidentified taxpayer with the consent of the appeal commissioners or the High Court.

In the same year, the Revenue Commissioners were given much freer access to third party information for the purpose of validating tax returns. A number of miscellaneous powers were enacted including the introduction of a requirement that the donor of a gift, as well as its recipient, should make a return to Revenue detailing its particulars. These extensive and previously unenvisaged powers have had profound effects on the successful pursuit of institutional and individual tax evasion. It cannot be denied that they have struck at the core of the culture of secrecy employed so effectively by institutions and individuals in a manner which allowed fraud and evasion to thrive and spread for decades. The evidence of this fraud and evasion is emerging now.

The 1999 measures, additional powers granted since then and new structures within the Revenue Commissioners, including the establishment of the dedicated investigations and prosecutions division last year, have resulted in the recovery of upwards of €1 billion under different headings. Under the DIRT heading alone, some €800 million has been recovered. All speakers have referred to the recent report of the Revenue powers group which I wish to refer to in detail later if there is an opportunity. The report states that certain recently introduced Revenue powers have clearly been used to considerable effect.

The report also states that Revenue figures show a clear link between the power to access information on DIRT from financial institutions and the substantial yields from settlement of cases arising from the use of these powers. It further states that the powers have been cited by the Revenue Commissioners as essential to their success in the DIRT look-back audits, follow-up projects investigating the underlying depositors and the inquiries into Ansbacher and other offshore entities. According to the chairman of the Revenue Commissioners when addressing the Committee of Public Accounts last October, the aggregate figure in the context of these matters comes to approximately €892 million.

To be fair, no Minister for Finance in the history of the State has provided the Revenue Commissioners with as many additional powers as the current office holder. If any Minister has been the bane of tax experts and analysts, history must record it has been him. The name and shame campaign has been referred to and, with some reservations, I believe it has been successful, although some might say that success has been moderate. The Minister for Finance's programme of providing additional powers and resources to the Revenue Commissioners on a review by review basis together with the establishment of the investigations and prosecutions division will reap rewards in the years ahead. The division refocuses the thrust of the Revenue's programme of investigation.