The chairman of the Revenue Commissioners yesterday gave short shrift to bogus non-resident account holders who say that their banks helped hide their savings.
Bogus account holders must be held answerable for their actions regardless of any encouragement given by banks, Mr Frank Daly told the Dáil Public Accounts Committee.
Last month, a number of former holders of bogus non-resident accounts initiated proceedings against AIB, accusing it of facilitating their illegal savings.
Asked by Labour Leader Mr Pat Rabbitte if he sympathised with such individuals, Mr Daly said they had knowingly concealed earnings from Revenue and must pay for their actions.
"At the end of the day the decision is the decision of the account holder," said Mr Daly.
He also shrugged aside an attack from Socialist TD Mr Joe Higgins, who castigated Revenue for not pursuing bank officials who participated in the non-resident account "scam".
For reasons of practicality, it had been decided to seek the repayment of DIRT from banks rather than to attempt to apportion blame.
Aggressively pursuing the banks would have resulted in a stand-off and a lengthy legal battle, Mr Daly said.
"We had to go about this in a pragmatic way. Had we done otherwise. the shutters would have come down."
On average, bogus account holders have paid three to three-and-a-half times the value of their original tax liability in interest and penalties, Mr Daly said.
He also questioned the morality of tax avoidance, saying that, in extreme cases, exploiting legal loopholes was not very different from a guilty man walking free because of a legal technicality.
"If people avoid paying tax someone else has to make up the shortfall," Mr Daly said.
In the wake of revelations that a construction developer saved €18 million in VAT by taking advantage of a loophole, Revenue is investigating the accounts of 21 other builders, though it has yet to be established if any had underpaid VAT, Mr Daly said.
A new investigative unit dealing specifically with the building sector is being established, Mr Daly said.
The loophole was brought to the attention of Revenue by the chair of the Public Accounts Committee, the Fine Gael TD Mr John Perry.
VAT avoidance by builders appeared to be concentrated in Dublin, although Revenue has not ruled out uncovered similar practises in the rest of the State.
When it was suggested Revenue should have identified the VAT loophole, Mr Daly said it is unrealistic to expect the Commissioners to weed out every tax avoidance measure without the public's assistance.
"I would have liked to be able to come here and say we picked this up... developers are in the self-assessment regime.
"Perhaps we need to be more incisive in examining their returns," he said.
