Tax evasion an attack on democracy, says Harney

TANAISTE Mary Harney yesterday described the systematic evasion of tax by some Ansbacher account holders as an attack on democracy itself.

In a special resitting of the Dáil to debate the Anbacher Report, Ms Harney said the scam denied the State of vital funds during the 1980s, but insisted that business and political culture had now moved on.

“A State that does not collect its taxes through lack of will or authority, or as a result of a degeneration of its political culture, is a failed State,” she told the Dáil yesterday.

But Ms Harney clashed with her Government colleague Finance Minister Charlie McCreevy, over who was to blame for allowing the depositors to get away with it for so long.

The Tánaiste said the Central Bank had failed to adequately supervise the banking system - but Mr McCreevy said it had discharged its functions well during the period covered.

Mr McCreevy said the Central Bank and the Revenue Commissioners are examining the Ansbacher Report with a view to identifying the follow-up action required. The gardaí are also examining the report with a view to taking action on foot of its findings.

Ms Harney said it would be naive to think that the Ansbacher scam was “the only game in town” and said the new powers of the Central Bank and Revenue would help to root out any other tax evasion schemes.

She said the publication of the Ansbacher report was significant of a change in political and business culture and insisted this was due to political leadership and low tax rates.

“The change in political culture was achieved by effort, integrity and tenacity of former and present members of this House. If the report points to failure of the State, it must be remembered that its existence and the Government’s actions point to a healthier, functioning society,” Ms Harney said.

A number of measures, such as appointment of a Director of Corporate Enforcement and new powers and resources to the Revenue and Central Bank, meant that supervision of the tax regime has improved. She also said the Government would introduce new legislation later this year aimed at improving scrutiny of auditors and accountants.

This will include the establishment of the Irish Auditing and Accountancy Supervisory Authority, an independent body that will regulate both professions and have powers to investigate any wrongdoing.

“Our ability as businesses, shareholders, workers and managers to generate wealth in our society and for our society depends on careful and basic trust among ourselves,” Ms Harney said.