Offshore tax evaders yield almost €1bn to Revenue

THE bogus and non-resident accounts scandal scaled new heights yesterday as it was revealed that Revenue will soon have recovered €1 billion from tax evaders and that two further banks are the subject of fresh investigations.

In another highly significant development, Revenue chairman Frank Daly yesterday promised that banks and accountants who aid and abet tax evaders will themselves be stringently punished in future. To date just one accountant has been prosecuted in connection with aiding tax evasion.

Mr Daly revealed that the latest Revenue investigation into bogus non-resident accounts, this time involving customers of Bank of Ireland’s Jersey subsidiary, had already netted €111m. The latest tranche brings the Revenue’s total take from its tax probes in this area to €892m.

Mr Daly also disclosed that two other financial institutions - one of which has been confirmed as Irish Life and Permanent - are under investigation.

Irish Life and Permanent last night confirmed they have already sent thousands of letters to Irish-based customers of its Isle of Man subsidiary advising them of the Revenue investigation.

However, while confidently predicting that the figure would shortly surpass the billion mark with these two institutions under scrutiny, Mr Daly acknowledged the Revenue’s record in clamping down on financial institutions complicit in tax fraud has been poor to date.

Quizzed by members of the Public Accounts Committee, Mr Daly gave an undertaking that aiding and abetting tax fraud would form an integral part of Revenue’s remit.

“We want to do things in a different way in the future. We want aiding and abetting to be in there. If there is a pattern emerging that some grouping or institution has been involved in aiding and abetting we will pursue that.”

Mr Daly declined to indicate whether or not there was ample evidence that banks actively enticed customers to engage in tax avoidance. “I’m not at this stage at liberty to say how actively this was facilitated by this bank or any bank,” he said.

Committee member Michael Noonan said law-abiding workers were becoming increasingly angry as the extent of tax avoidance perpetrated became apparent. Fingering “the shadier side of the financial world”, he said he had no doubt many customers had been encouraged to avoid tax through offshore accounts and trusts.

“PAYE people are generally complaining and are becoming more angry. It seems like the culture of compliance is stopping at the door of the financial institutions.”

Committee colleague Paul Connaughton said he knew of many who did not realise what they were getting into as they trusted what they were told.

“Of course, some people knew what they were doing. But there were a lot of people who were elderly, normal labourers who earned their money the hard way, who took what they were told literally.”

Labour’s finance spokeswoman Joan Bruton said the revelations demonstrated the absolute need for Revenue to keep turning the screw on tax evaders and the need for the Oireachtas to continue tightening revenue law to close off further loopholes.