Net tightens on Irish tax dodgers

THE Revenue Commissioners are poised to sign deals with some of the world’s most secretive tax havens in the world in a bid to prevent tax dodgers hiding their money abroad.

Irish officials have met with authorities in the Isle of Man, Guernsey, Jersey and the Cayman Islands and are confident agreements will be struck early next year to share sensitive banking information.

The deals would provide access for the first time to details about the owners of companies and trusts and help throw light on Irish-owned holdings, such as the Ansbacher accounts.

The tax information exchange agreements are expected to be officially signed off next year following months of negotiations.

A special overseas assets unit of the Revenue Commissioners will be able to use the information to track down the offshore assets of Irish residents and ensure they meet domestic tax regulations.

These tax havens have been under substantial pressure to change the way they do business since the US stepped up its drive to hunt down the assets of terrorist organisations since the September 11 atrocities in 2001. The Cayman Islands is in discussions with a number of countries to open up its banking system to scrutiny, while Guernsey and Jersey are to introduce new European laws to exchange information about the savings held by EU citizens.

The information will be crucial as the Revenue is currently examining the tax affairs of almost 700 individuals, companies and trusts as a result of the Ansbacher investigation.

A spate of financial scandals in recent years, such as the bogus non-resident accounts and the Ansbacher scam, revealed that tax evasion took place on a massive scale during the 1980s and 1990s.

This year alone the Revenue has collected 100m from Irish residents who held bogus non-resident accounts. The Organisation for Economic Co-operation and Development, nicknamed the 'rich nations club', has identified 35 countries, such as Monaco and Liechtenstein, which have been given until April, 2003 to create a more transparent tax culture or face the prospect of sanctions.

Progress in closing down the number of hiding places for tax evaders comes at a time of major change in the Revenue Commissioners.

A specialist division has been set up to ensure large businesses and wealthy individuals are monitored effectively. This follows criticism that it was paying more attention to ordinary workers than rich individuals.

Another new unit is specialising in tax and customs prosecutions and it is understood that around 30 cases are currently being investigated.

Under legislation enacted in 1999, the Revenue now has extensive powers, by using High Court orders to access the records of banks, building societies and other financial institutions. These have been crucial in tracking down the holders of the Ansbacher accounts and bogus non-resident accounts.