Tax evasion and the Revenue settlement
Rabbitte challenges the scale of tax evasion and asks how a major settlement was achieved; the Taoiseach credits Revenue’s powers and says tax cases are independently examined. Members also question whether evaders should be prosecuted and criticize political connections.
The Taoiseach will recall that one of the main factors giving rise to punitive taxation over a generation was the massive, widespread and endemic scale of tax evasion. He will recall that the Minister for Finance of the day used to claim there was no pot of gold out there and it took various tribunals and good journalism to highlight that this was a society in which tax evasion was normal and that only people whose taxes were deducted at source and some other tax compliant citizens contributed to the cost of running the State's services. A figure was put on the scale of tax evasion by inquiries such as the Ansbacher inquiry, the NIB investigation and the DIRT investigation, which has retrieved almost €1 billion for the Exchequer. We thought we were in a new era but we now read of a tax settlement of €25 million, the largest in the history of the State, by a building company called Bovale Limited, the principals of which are two prominent members of the Taoiseach's party. They are also prominent donors to his party and attendees at every significant Fianna Fáil occasion. Has the Taoiseach taken action as a result of this settlement? How does the tax compliant citizen know whether this massive scale of settlement is unique to this particular building company? How are we to know whether other companies have a similar dedication to evading their tax liabilities?
Tax evasion is not a victimless crime. The moneys are deprived of those who are dependent on the State for a safety net in terms of minimal welfare payments and on getting access to a hospital bed and so on. What signal does it send out to tax compliant citizens that the perpetrators involved in this episode are feted at every significant event held by the Fianna Fáil Party? Does the Taoiseach intend to take action on this matter now that it has been finally resolved and the scale of evasion has become evident to all?
Comment on this
I agree with Deputy Rabbitte that people who abuse the tax system, avoid or evade tax or operate outside the tax code are committing a serious offence against compliant taxpayers, not to mind against the law, and nobody should do that. This Government and Governments of which I have been a member have, in the past ten years and more, strengthened our legislation and enhanced the powers and capacity of the Revenue Commissioners to become a very efficient organisation in stopping breaches and defaulters.
As the Deputy knows, individual cases are not brought to the attention of the Government other than through the publication of cases by the Revenue Commissioners, a document we will all receive later in the year. I hope this case is true as it will show the success of the system and prove that the powers we have put in place, the laws we have enacted and the procedures that are operated are working effectively and that large settlements of tens of millions of pounds, the amount of money that ordinary people would not understand, are now being made by many people.
Most Members of this House are not against wealth creators but we are against people operating against the laws of the land and the Revenue Commissioners. In this case, if it is true, I congratulate the Revenue Commissioners and the Department of Finance, which works with Revenue to enact the laws and procedures that ensure people are tax compliant. As far as Bovale or any other company is concerned, I am glad it was caught and has to pay up.
Comment on this
I agree with the Taoiseach that nobody in this House is against wealth creators. For that reason, we have a very low corporate tax regime and a number of instruments that can be used to minimise tax, yet we have this scale of evasion. With all due respect to the much improved revenue collection facilities, the settlement does not owe anything to the Revenue Commissioners but was the result of a tribunal of inquiry. The Taoiseach says we are not against wealth creators but it appears the unfortunate person who buys a house in this country has to pay a king's ransom in stamp duty, whereas no limits are put on the profits to be made by the big companies which build the houses. Despite that, they are not prepared to pay their due taxes.
I visited the website of the company in question, which states: "Bovale have gained an unrivalled reputation for meticulous attention to detail". This evasion has been going on for years but I do not know whether a file has been referred to the DPP and did not hear the Taoiseach reply to the point that the people concerned are conspicuous at Fianna Fáil events, major donors to the party and prominent in the tent at the Galway Races. They have engaged in this scale of tax evasion at a time when most citizens, notwithstanding the new affluence being experienced in this country, find it hard to make ends meet and pay their taxes as best they can. I know the situation in Revenue has improved in recent years and commend the agency on that. However, much of this evasion took place over an entire generation under the very noses of the Revenue Commissioners, with little action taken. I am satisfied the culture has changed but I am not satisfied that sufficient resources have been put into, for example, random audits of self-assessment or that the Revenue Commissioners have had the resources in recent years to apply themselves to this industry, which is a major locus of bogus subcontracting and widespread tax evasion.
Comment on this
The settlement is to the credit of the Revenue Commissioners and the powers they possess. Tribunals carry out useful work but they do not collect taxes and cannot operate settlements or examine the issues which can lead to huge settlements such as this one. Their work is undoubtedly helpful to that but the cases have to be examined independently and verified by the Revenue Commissioners.
We have provided low taxes and many incentives to those who are wealthy enough to invest their money. I am not interested in rehearsing the political affiliations of the people on the Revenue Commissioners' lists.
Comment on this
Is the Taoiseach not embarrassed that his candidates are accepting money from these people?
Comment on this
Deputy Seán Ryan's leader is capable of dealing with his own question and does not need the Deputy's help.
Comment on this
All companies and individuals should abide by the law. They should not be involved in evasion or avoidance.
Comment on this
I ask Deputy Burton to allow the Taoiseach to speak without interruption. Her leader went five minutes over the time allowed for the question and she should not continue now.