Statement by Mr Frank Daly, Chairman of the Revenue Commissioners, to the Public Accounts Committee, 22nd July 2004.
With your permission Chairman, I will give a brief update on the ongoing investigation by Revenue into offshore accounts and trusts.
The Committee will recall that Revenue initiated this investigation last year when we focussed initially on trusts held in a Jersey based institution owned by Bank of Ireland and subsequently on accounts held in an Isle of Man based institution owned by Irish Life and Permanent plc. I then held a series of meetings in December, 2003 with the chief executives of the ten major Irish financial institutions. At, or following those meetings, the institutions concerned signalled that they would co-operate with a comprehensive enquiry by Revenue into all off-shore accounts. Revenue gave account holders up to the 29th March 2004 to make voluntary disclosures and announced that the deadline for payments would be 28th May 2004. In response to requests from individuals and representatives of accountants and tax practitioners who were having difficulty assembling the necessary information this 28th May deadline was subsequently extended by a few weeks to the 10th June.
This was the Voluntary Disclosure phase of the offshore investigation and during this phase the total amount collected from just over 14,000 individuals is now €677 million. €546 million of this was collected this year and €131 million in 2003.
I think that the response to this initiative to date, particularly when compared with the results from the voluntary disclosure phase of the Bogus Non Resident Accounts (BNR) investigation indicates that there is now a growing recognition that Revenue are focused and determined in pursuing outstanding tax liabilities.
Undoubtedly, however, there are individuals who have failed to avail of this voluntary disclosure opportunity and they will now be the focus of our attention in the next phase of this investigation as we follow through on the non-disclosers. Preparatory work to secure High Court orders to identify those individuals who failed to make a voluntary disclosure is already underway. I anticipate applications to the High Court will be made in the autumn in which we will seek to have the full lists of account holders disclosed to us by the financial institutions.
Individuals identified during this phase will face additional penalties, will also face publication and will be considered for prosecution. Nobody should be in any doubt about our intention to follow through on this investigation.
That Chairman brings the Committee up to date on the main offshore investigation but as usual when I appear here the Committee may also be interested in hearing the latest figures from the other major ongoing investigations.
- For Bogus non-resident accounts the figure now stands at €759 million, made up of €222 million in DIRT paid by financial institutions, €227 million paid under the voluntary disclosure scheme and €310 million paid in the investigations since then;
- For the NIB/CMI investigation the figure stands at €51 million;
- For the Ansbacher investigation the figure is €43 million;
- For Moriarity and Mahon/Flood Tribunals follow through the figure is €25 million.
Today's running total as a result of all these investigations therefore stands at €1,555 million - this is an increase of over half a billion € since I last reported to the Committee on the 25th March 2004.
If I may, with your permission, Chairman, add to my statement some details which were just finalised yesterday evening after I forwarded the statement to the Committee.
The Committee will recall that following receipt of declarations from taxpayers in the voluntary disclosure phase of underlying tax due in relation to bogus non-resident accounts, information emerged that led Revenue to review the position of a financial institution in relation to the DIRT look-back audit. This situation was commented on by the Comptroller and Auditor General in his 2002 Annual Report. The institution concerned is Anglo Irish Bank Group.
I also mentioned at an earlier meeting (16th October 2003) of this Committee that if anything emerged from the review of Anglo Irish Bank that required a change to the Dirt Look-Back Audit Report furnished by Revenue to the Committee on 31st October 2000, that I would notify the Committee as soon as I had the facts.
The review included a full re-audit of Anglo Irish Bank. The audit has just been finalised and has resulted in a DIRT liability (including tax, interest and penalties) of €3,162,136 million, which was received by Revenue yesterday. This brings the total DIRT paid by financial institutions to €225 million and the overall total from investigations to €1,556 million.
Revenue launch major investigation of undisclosed accounts or investments outside the State.