A high-level advisory group to the Government has recommended that extra powers be given to the Revenue Commissioners to fight tax evasion, writes Joe Humphreys.
The seven-person group, chaired by former Supreme Court judge Mr Justice Francis Murphy, says Revenue officials should have access to telephone records and be permitted to question people in Garda custody as part of criminal investigations.
It also calls for improvements in the Revenue's offshore information powers so it can establish the owners of assets over which there is a tax liability.
To counter-balance these enhanced powers, however, the group recommends new safeguards against abuse, including the removal of the power to search a premises without a warrant, and the introduction of a specific statutory limit on the period for which seized records can be retained.
Publishing the report yesterday, the Minister for Finance, Mr McCreevy, said he had decided to grant the Revenue new powers to access records held by Irish financial institutions offshore under the Finance Bill 2004.
But as for the group's other recommendations he was allowing "a period for public debate and reflection" before considering them in the context of next year's Bill.
In a 160-page report, the Revenue Powers Group found that Revenue powers in Ireland were "generally in line with international norms", as well as being "adequate to allow Revenue to carry out its task with the exception of a limited number of areas."
It stressed an "appropriate balance" was necessary in the area, recommending the introduction of "new objective preconditions" for the use of more intrusive powers.
It also calls for extended appeals provisions, focused on access to the Appeals Commissioners.
On penalties, the report said there was a need for a codified structure, including the reduction of "penal" tax rates charged against evaders.
The 200 per cent penalty and 24 per cent interest rates should be abolished, and a new category of "innocent error" linked to recent track record be introduced.
It said the standard interest rate should be reduced from 11.75 per cent to 10 per cent, and the publication limit for certain tax settlements be raised from €12,700 to €50,000.
Mr McCreevy said the review was necessary to assure the Government and the public at large that the Revenue's powers were meeting the needs of the system and were being used fully as the Oireachtas had intended.
The members of the group were Mr Justice Francis Murphy; solicitor Ms Julie Burke; tax practitioner Mr James Jennings; tax lawyer Ms Suzanne Kelly; Mr Sean Moriarty, assistant secretary of the Revenue Commissioners; tax accountant Mr Michael Mullins; and Mr Roderick Ryan, executive director of Glen Dimplex.
The Institute of Chartered Accountants in Ireland (ICAI) welcomed the report, saying it was particularly supportive of the call for increasing the publication threshold, and improving access to the Appeals Commissioners "as an important step towards a balanced and fair collection system."
ICAI chief executive Mr Brian Walsh added: "rather than delaying its implementation for a further year, we would propose that the measures be introduced by way of a second Finance Bill later this year."
The Labour Party's spokeswoman on finance, Ms Joan Burton, was more critical of the report, saying it "contains little of substance to tackle tax evasion or tax avoidance."
