Labour: People 'getting away with tax fraud'

The Government is treating social welfare fraud far more seriously than tax fraud, creating a great imbalance in the system, it was claimed today.

Liz McManus, deputy leader of the Labour party, said the number of people being jailed for welfare offences was “remarkable” while at the same time tax criminals could simply buy their way out of prosecutions because they could afford the financial penalties.

The Department of Social Affairs’ annual report revealed that the number of cases of social welfare fraud resulting in court proceedings had increased by almost three quarters last year.

Some 210 criminal cases were finalised in the courts, resulting in 11 people being jailed and 17 given suspended sentences.

By contrast, the Revenue Commissioners’ report published last month revealed just seven convictions for serious tax evasion in 2003. Fines were imposed in six cases and a two-year suspended sentence imposed on the other. Nobody went to jail.

Ms McManus said the failure to secure criminal prosecutions for tax evasion would lead to a sense of great public disappointment given the high profile nature of accountants and banks involved in recent scandals.

“It is very interesting that we have such effective methods of dealing with social welfare fraud but when it comes to tax, people are in effect, getting away with it,” she said.

“The Ansbacher Report, published in July 2002, revealed a detailed web of criminality, yet two years on there has not been a single prosecution.

“The double standards are clear and the law has got to be applied equally. Such reports suggest that if you are poor you will feel the full rigour of the law but if you have a more powerful position in society you can escape prosecutions and jail sentences.”

She claimed tax crime would only be wiped out when those involved were convinced there was a real risk of going to jail if caught.