Sir, - DIRT tax was introduced in the 1986 Budget and revenue from it was estimated at £78 million. Last week the Revenue Commissioners supplied me with the actual receipts as below:
Payments of Deposit Interest Retention Tax (DIRT) 1986 - £137.1 million; 1987 - £296.7 million; 1988 - £205.8 million; 1989 - £185.4 million; 1990 - £270.7 million.
Clearly something was very wrong when receipts for the first full year of application (1987) exceeded estimates by a factor of four. Was there four times as much money on deposit in banks, building societies etc. as the Department of Finance had estimated? Where did all this unexpected money come from? How come our Department of Finance didn't know about it? (Interest rates are actually lower in 1987 than when the first estimate was made!). And when they found out why didn't did they do something about it?
This peculiar situation is followed by a dramatic drop in revenue in 1988 and 1989. Maybe some of the 1988 drop was attributable to interest rate drops, but the evidence of later years suggests otherwise. A more convincing explanation is that large sums fled the country or into "non-resident accounts". The latter seems likely since in 1990, when the Revenue were beginning to make some noises, revenue jumped again by roughly by 50 per cent, even though interest rates in 1990 were actually lower than in 1989.
As with most of the excesses of tax evasion in this country (ostentatious lifestyles, proliferating "non-resident" accounts, disproportionately high purchases of "executive" cars, banks heavily advertising the "confidentiality" of their accounts) the prima facie evidence was plentiful. The trouble was nobody really wanted to prove anything!! - Yours, etc., Brendan Ryan,
Seanad Eireann,
Baile Atha Cliath 2.