The chairman of the Revenue Commissioners, Mr Dermot Quigley, told the Dail Committee of Public Accounts that new legislation may be needed if the effectiveness of the Revenue was to be improved.

Mr Quigley said "contrary to recent comments, the Revenue has very limited powers in the area of non-resident accounts and bank accounts generally". "If we want to get access to a bank account we have to go to the High Court and this is very onerous," Mr Quigley said.

He claimed that an order from the High Court only governed investigations of resident accounts and not non-resident accounts.

Mr Quigley said lack of powers was one reason why the Revenue could not estimate the scale of bogus non-resident accounts at AIB.

He said the tax amnesty of 1993 did not yield any information about the numbers of bogus non-resident accounts in the banking system.

The money from the amnesty was collected by the chief special collector and he said legislation meant there was "a Chinese wall between him and the Revenue".

In response to a question from Fianna Fail TD, Ms Beverley Cooper Flynn, he said: "We learnt nothing new about bogus non-resident accounts from the returns made during the tax amnesty."

He said the Revenue did not have the power "to do a general trawl through bank accounts" and did not "have wide policing powers". He added that Revenue had no power in law to obtain documents from banks either.

He said a provision allowing the Revenue to order documents from banks was taken out of previous legislation by politicians. A Department of Finance spokesman said such a provision had been removed from a previous Act when an amendment was put down by one of the political parties.

Mr Quigley said the system currently meant that financial institutions "police themselves". However, he said prosecutions for tax evasion were increasing and the Director of Public Prosecutions is now accepting cases directly referred to him by the Revenue.

He said a "review of the adequacy of Revenue powers in the financial area has already been put in train by the Minister for Finance following disclosures of tax evasion in recent years". "We are participating actively in the review and have come up with proposals about how the law might be amended," he added. In regard to confidentiality, he said legislation might be considered which would allow the Revenue "in cases of significant public interest" to provide more information than normal.

He said additional information might be included in the Revenue's quarterly list of tax defaulters.