Dunne faces quiz over meeting with tax chief

FORMER supermarket magnate Ben Dunne will appear before the Moriarty Tribunal today to answer questions about a meeting with Revenue Commissioners chairman Seamus Paircéir in 1987 to discuss a controversial tax bill issued to Dunnes Stores.

The tribunal has heard evidence that the meeting between the two was held at the request of the then Taoiseach, Charles Haughey, at a time when Dunnes Stores had concerns about its ability to pay a multimillion-pound tax bill.

None of the three referred to the meeting when giving evidence in 1997 to an earlier inquiry - the McCracken Tribunal - which also investigated the source of large sums of money paid by businessmen to Mr Haughey.

The Moriarty legal team is expected to ask Mr Dunne if there was any link between Mr Haughey’s intervention in the tax affairs of Dunnes Stores and £1.9m in payments he gave to the former Fianna Fáil leader from 1987 to 1993.

The tribunal has heard evidence from Revenue officials over the past fortnight that a tax bill issued to the Dunnes Stores family trust was reduced from £38.8m to £16m following the meeting between Mr Dunne and Mr Paircéir.

Mr Dunne will also be examined about a decision of Mr Paircéir to waive an interest payment of £62,450 on a separate tax bill, as well as his hiring of the former tax official within months of his retirement from the Revenue in 1987.

Meanwhile, former Dunnes Stores accountant Noel Fox told the tribunal yesterday he was aware Mr Dunne was giving large sums of money to Mr Haughey at the time the company was negotiating a large tax bill with Revenue.

Although Mr Fox - a trustee of the supermarket group - said he had no specific recollection of meetings almost 20 years ago, he did not disagree with the contents of Revenue officials’ notes about discussions on the Dunnes Stores tax assessment.

Mr Fox was a central figure in arranging many payments made by Mr Dunne to Mr Haughey.

The inquiry heard there was “no capacity” within Dunnes Stores to pay a tax bill based on the Revenue’s lowest estimate of the value of the group’s family trust, which was £82m.

As a result, Dunnes Stores had no alternative but to extend the trust beyond its original term, which was due to expire in 1985.

Mr Fox claimed a suggested bill of £16m offered by the tax authorities was “never taken up or acted on”. He said Dunnes Stores had entered “nil” for capital gains tax as they felt so strongly that the trust had no liability on this issue.

“It was unjust. That is the way we felt,” he said.

However, the inquiry’s legal team did not ask Mr Fox why he did not refer to the meetings with Mr Paircéir in his evidence to the McCracken Tribunal.

The witness said he had no recollection of negotiating with the Revenue over £62,450 in interest due for a delay in paying a discretionary trust tax bill of £3.5m in 1987.

He insisted it would have been “normal practice” to try to negotiate the size of interest payments when paying such a large sum.

However, he rejected suggestions there had been a waiver of interest by the Revenue and stressed a figure for interest of £400,000 had been built into the £3.5m payment.

Mr Fox said Dunnes Stores trustees had never engaged Mr Paircéir as a tax adviser, but understood he had been personally hired by Mr Dunne.

The accountant said he had several meetings with Mr Haughey between 1985 and 1988, including a number of social occasions, but said he had never discussed the Dunnes Stores trust with him.