Republican News · Thursday 26 June 2003

§700 million in tax evasion - only three convictions

BY ROBBIE SMYTH

§29 billion in tax was collected by the 26-County Revenue Commissioners last year, up §1.25 billion on 2001. Make a note of this figure, because exchequer returns from the Department of Finance earlier this month show tax receipts falling already by over §500 million for the first five months of 2003. The economy is clearly not generating enough funds to run even the reduced level of services it outlined in last December's budget cutbacks.

This means that ensuring tax compliance is a priority for the government and Revenue Commissioners, particularly as study after study has shown that Dublin government taxes on business and high earning individuals are among the lowest in industrialised states. As a society, we should be doing everything we can to make sure everyone is making proper tax contributions.

Of the §29 billion raised last year, §700 million was secured from tax evaders who had either bogus non-resident accounts or were participants in illegal offshore tax evasion schemes. Earlier this year, An Phoblacht highlighted how the Revenue Commissioners had effectively tipped off Bank of Ireland that they were about to investigate one of their offshore banking operations.

BoI's Jersey Trust was the Revenue Commissioners' target. BoI had written to their 254 Irish customers with funds in Jersey warning them of the forthcoming investigation.

Now the Revenue has disclosed that §8 million has been voluntarily handed over by a small number of the 254 account holders. The main Irish banks have literally billions of euro on deposit in similar trusts to the BoI Jersey scheme.

This §700 million garnered from tax evaders and defrauders is, believe it or not, a huge step forward for tax collection in Ireland. The current Revenue Commissioner chairperson, Frank Daly, has overturned decades of institutionalisation in the Revenue Commissioners by the simple act of transferring responsibility for tax evaders to come clean to the Revenue rather than waiting for the Revenue to find evasion.

In the past few weeks, 281 Irish citizens have admitted to the Revenue Commissioners that they were evading tax through offshore schemes.

Now, Anglo Irish Bank has disclosed that it has handed over financial information on Irish customers who have deposits in its Isle of Man operations. The bank has over §1 billion in funds on the island. Permanent TSB is to write to 750 of its Irish customers who hold funds in the Isle of Man that they are closing deposit accounts there.

Maybe, though, it is time for the Revenue Commissioners to take another positive and very logical step of prosecuting and convicting tax evaders, and maybe take the drastic step of jailing one or two?

One of the interesting parts of the Revenue Commissioners' annual report was that there were 1,038 convictions for failure to file tax returns, 221 convictions for unlicensed trading, 59 convictions for smuggling, customs fraud and illegal selling offences. Only three people were successfully prosecuted for tax evasion.

You could draw the conclusion that, though the Revenue Commissioners see their job quite rightly as ensuring tax compliance, sending tax evaders to jail seems to be someone else's job.

It is clear that a huge amount of tax crimes are being committed but we don't have a clear picture of really how many there are and how few are going to jail. The Garda annual report has a lot of detail on crime including small things such as bicycle theft. There are no details though on how many tax evaders or defrauders we have.

In the wake of the Enron and WorldCom financial scandals in the US last year, a new precedent was set in the enforcement of corporate crime. It is called the "perp walk", where law enforcement officers arrived at the slick corporate headquarters and took away often babbling executives in handcuffs, much the way in which the rest of the world is treated by the law enforcement community. The pictures sent shockwaves through the US business community. How could you ever show your face at the yacht/golf/county club ever again?

Is it time for the 'perp walk' for Ireland's tax defrauders?