The Minister for Finance, Mr McCreevy, must ensure the Revenue Commissioners is forced to compensate people refused tax rebates during the 1980s, Fine Gael has said.
Fine Gael's finance spokesman and deputy leader, Mr Richard Bruton, called on the Minister "to issue a direction, or change the law", if the Revenue refuses to back down. Condemning the handling of the cases, Mr Bruton said the Revenue had been "obstructive and unfair".
"It will fuel cynicism about a system which should command respect. He must ensure that interest and proper compensation is paid. Its refusal to refund in full, and with interest, tax overcharges against these two women must be condemned in the strongest possible terms.
"The Revenue has rightly been given strong powers to ensure errant taxpayers pay up, but it will undermine its position if it is seen to abuse its powers in dealing with compliant taxpayers."
Describing the Ombudsman's report as "unprecedented", the Labour Party demanded that Mr McCreevy ensure the tax authorities obey the Ombudsman.
The core issue, said Labour Party finance spokeswoman Ms Joan Burton, was "the citizen's right" to seek redress from the State when they were the victims of poor administration. "Revenue is quite rightly entitled to charge interest when citizens don't pay their taxes. The same principle must apply when Revenue overcharges citizens in cases of proven mal-administration," she said.
Congratulating the Ombudsman on his firm stand, she continued: "Is Revenue to be immune from the normal systems of accountability that apply to other Government Departments? It is now up to Mr McCreevy to make it clear that he sides with the Ombudsman in his attempt to vindicate the rights of ordinary citizens."
Meanwhile, the Green Party said the Ombudsman's report made for "disturbing reading", since it showed that the Revenue's operation was "still showing no real signs of improvement".
"It shows that the organisation continues to have poor human relations and poor public relation skills, and seems incapable of responding to sensitive inquiries in a speedy and efficient manner," said Green TD Mr Dan Boyle.
