Policy on naming defaulting taxpayers to be reviewed

THE Minister for Finance is to consider whether to revise arrangements for publishing names of defaulting taxpayers, Ms Avril Doyle, Minister of State, said.

She was responding to the Progressive Democrats spokesman on finance, Mr Michael McDowell, who said there was a great deal of public concern about the reported payment of £1 million in penalties, arrears and interest by the principals of a Dublin public relations firm to the Revenue Commissioners through a Panamanian shipping company.

Mr McDowell, in an adjournment debate, said many people wanted to know why there appeared to be a discretion which allowed some taxpayers to be personally held up to public judgment for tax arrears while others were afforded the privacy of "the veil of incorporation" for acts of default.

It would appear that there must have been a substantial personal liability to tax involved in this case. It could not have been a question of liability to corporation tax alone. If personal liabilities existed in connection with the Panamanian company's liability, the public was entitled to know on what basis corporate rather than personal penalties were imposed.

Because the tax system was operated in virtually complete confidentiality the exact circumstances of the liability were unlikely to be revealed. "But what we do know is that someone, somewhere, with insider knowledge, was so angered by the circumstances that he or she blew the whistle."

The public should be told why it was decided to publish the penalties under an obscure corporate name and whether a similar decision would be made in future.

If the tax amnesty of 1993 had been availed of, this transaction would never have come to light and the individuals concerned would have saved 90 per cent of the penalty and paid only £100,000. Also, the ordinary tax inspectorate would have been kept in the dark about the modus operandi and the default.

Ordinary taxpayers who paid their taxes and had to borrow and mortgage their homes to comply with Revenue requirements had to produce tax clearance certificates. They found it hard to understand how people "who break every rule" could avoid serious consequences and even the public embarrassment of hard questions being asked about them.

Ms Doyle said the law provided that the name to be published as the name of the person upon whom a fine or penalty had been imposed by the courts or with whom the Revenue Commissioners had made a compromise settlement, including a mitigated penalty. It did not provide for publication of the names of the directors or proprietary shareholders of companies which had themselves made tax settlements with the Revenue.

Since that law - Section 23 of the Finance Act, 1983 - was enacted, the list published in the annual report of the Revenue included a significant number of companies whose directors or shareholders were, quite properly under the law, not identified.

"Whether or not there would be a public benefit in revising these arrangements is something the Minister will consider, but it is undoubtedly a complex issue," said Ms Doyle.