The Revenue Commissioners are to get new powers to facilitate the pursuit of up to €1 billion owed in tax on insurance products used to evade tax. John McManus, Mark Hennessy and Arthur Beesley report.
The Finance Bill, published today by the Minister for Finance, Mr Cowen, will contain measures to aid the Revenue's inquiry into the abuse of single-premium insurance policies which was set up last year.
There will also be an increase in the threshold for publishing names and addresses of tax defaulters from €12,700 to over €30,000.
The Public Accounts Committee was told last year that up to €30 billion was invested in single-premium products between 1988 and 2001, and that the tax owed could be over €1 billion.
Single-premium policies were investment products aimed at investors with significant lump sums. They were an attractive home for hot money as the insurance company paid the tax on the profits from the policy, and there were no liabilities associated with the funds paid out when the policy matured.
The investigation into the abuse of these policies is modelled on the successful investigation into offshore assets carried out last year. In order to facilitate this investigation, the Revenue Commissioners were given the right to apply to the High Court to force banks to hand over information held by their offshore operations.
The new measures announced will include powers to get information about offshore accounts. Tax officials will also be given enhanced powers of criminal investigation, including access to telephone records and the power to question people in Garda custody.
As an incentive to co-operate with the Revenue Commissioners, tax evaders will no longer have their names published unless they are forced to pay over €30,000 in settlement. The new threshold will be linked to the Consumer Price Index so that it will not need to be changed again. The Minister is expected to say that he will accept the majority of the recommendations of the Revenue Powers Group which reported to his predecessor, Mr Charlie McCreevy, last year.
The body, which was chaired by former Supreme Court judge Mr Justice Francis Murphy, recommended that the threshold be increased to €50,000, but Mr Cowen has decided this would be too high.
The Revenue will also get new powers which will require the automatic reporting of interest and of income on certain transactions, and also payments made by Government Departments to companies or individuals.
Today's Bill is also expected to include provisions which will broaden the scope of the Revenue to prosecute those who aid and abet tax evasion. In addition, the Bill is likely to strengthen the Revenue's power to penalise the self-employed for failing to keep proper records or books of account.