The quarterly list of tax defaulters published yesterday by the Revenue Commissioners contains most of the usual suspects, including business people and property owners who were allowed to build up a substantial tax liability until the Revenue finally lost patience. There was a time, a more innocent age, when the public might have been forgiven for thinking the defaulters' list represented the sum total of tax evasion in this State; after Ansbacher, National Irish Bank (NIB) and the rest, we know that it represents no more than the tip of the iceberg. The facts of tax evasion, as we now know them, bear repetition. About 700 individuals or companies had money or shares in the Ansbacher deposits or in National Irish Bank's offshore bond schemes. Some 53,000 bogus non-resident accounts, containing nearly £600 million, were held with Allied Irish Banks alone by Irish residents who wished to avoid tax or hide their affairs from the Revenue. According to RTE reports, account holders were encouraged to invest in certain NIB offshore products, told there was no need to avail of the tax amnesty and that the Revenue would never find out about the money.
The extent of tax evasion cannot be unrelated to the lenient manner in which evaders are treated. There has been no high-profile Lester Piggott-style case in which tax defaulters receive the full rigour of the law. Attitudes to such matters are rather more relaxed in this State. In Galway Circuit Court last week, a custodial sentence was imposed for the first time in a case in which a local businessman, with a £500,000 Isle of Man account, was convicted on 15 counts of tax evasion. The businessman in question received a two-year suspended sentence. The culture of tax evasion has been actively encouraged by government. The tax amnesties introduced by Fianna Fail in 1986 and 1993 were rightly described as a "charter for cheats". The same kind of ambivalence towards the tax defaulter still informs some official attitudes.
Tax evasion has also been underpinned by the failure of the State's regulatory agencies and by the apparent willingness of some financial institutions to facilitate breaches of the tax laws. Much can be done. At present, the Revenue can only seek details of bank accounts where they have details of a specific named depositor, who is suspected of tax evasion. New powers which would allow the Revenue to undertake a more general trawl of all bank accounts where they suspect tax evasion are clearly required. Earlier this year, the Minister for Finance, Mr McCreevy, signalled that these laws may be needed; the information unearthed since makes a compelling case for Government action.
A tougher sentencing policy from the courts and a clearer signal from the Revenue about how they propose to deal with the scale of tax evasion in this State would also help. The compliant taxpayers have listened with wry amusement for years as the authorities promise robust action. At this stage their patience is wearing thin.