Wallace to divert half of Dáil salary to pay tax debt

Independent Deputy Mick Wallace has said he is to use half of his Dáil salary to begin paying off the €2.1m VAT settlement his company reached with Revenue.

The under-fire TD made the pledge during an address to the Dáil this evening in which he attempted to present his case in relation to the tax-avoidance controversy.

The property developer-turned-politician has been embroiled in controversy after it was revealed he knowingly misled tax chiefs in relation to VAT owed by his now-insolvent construction company MJ Wallace Ltd.

Mr Wallace had initially distanced himself from the tax bill, stating it was the company’s liability and that as it is now insolvent, it could not be paid back to the authorities.

“This was not a cavalier comment, but a statement of fact,” he went on.

However, the 56-year-old said he was aware that his remarks had upset Irish citizens who were struggling due to the dire economic climate.

"In view of the fact that I now work for the people and am paid by the people, I feel obliged to look beyond the bounds of company law," said Deputy Wallace, before announcing that he would divert 50% of his wages towards reparations.

The usually flamboyant Independent was on the verge of tears as he addressed his colleagues – notably without his trademark pink T-shirt and instead dressed in a more sombre dark blue.

He apologised to his constituents in Wexford as he explained the details of his dealings with Revenue.

“In 2010, I made a self-declaration to the Revenue,” he went on.

“Revenue proceeded to carry out a full audit.”

Mr Wallace said an agreement to pay back the VAT owed was reached, but following a court case at the end of last year in which he was ordered to repay €19m to ACC Bank, it became clear the company could not make its repayments.

The Wexford TD said that while he had considered resigning his Dáil seat in light of the controversy, he had been overwhelmed by the support he had received from his constituents in Wexford and "was not a quitter".

"They say that those of us who speak out should be above reproach, but I would be at pains to stress that I will never be that," he said.

"I am just another human being who is very far from perfect and will remain so.

"I am answerable to the people of Wexford who elected me and they will discard me when they see fit.

"In the meantime I will strive to serve them, and all the people of Ireland, as well as I can."

He said cashflow problems and aggressive and inflexible banks had led his company to under-declare VAT.

Deputy Wallace admitted he was wrong and has apologised to those who thought better of him, in particular the people of Wexford.

"The manner in which the VAT was dealt with was, in hindsight, an error of judgement, made under pressure at a time when the approach of the banks was changing dramatically and the value of property was dropping sharply," he said.

"There was never any intention that the money that was owed would not be paid."

Read more: FULL DÁIL STATEMENT FROM MICK WALLACE