The Revenue Commissioners plan to use new powers from May to demand that tax dodgers hand over details of offshore bank accounts held with Irish financial institutions.
The powers, which the Revenue had lobbied for in recent months to strengthen its hand in a fresh investigation of tax havens, were included in the Finance Bill, which was published yesterday and is due to be signed into law in mid-March.
The move follows the Revenue's decision to write to the State's 10 major banks asking them to instruct their customers with accounts or policies in offshore locations to come forward to the tax authorities before March 29th.
Account-holders are being given 60 days to complete their returns before the Revenue takes further action.
Under its new powers, the Revenue will be able to apply to the High Court for an order requiring a financial institution to make records available for inspection. The first such orders are expected to be sought in early summer, depending on the outcome of the voluntary disclosure process.
A Revenue spokesman said yesterday: "We consider the new powers very helpful in our current investigations".
He added that the chairman of the Revenue Commissioners, Mr Frank Daly, had already met the heads of the 10 banks about the inquiry and "we understand they are going to co-operate".
Irish-based banks with offices in the Isle of Man and the Channel Islands will be targeted in the inquiry. And in a significant departure for the Revenue, subsidiaries in the North will also come under scrutiny.
The Revenue believes that millions of euro have been placed in Northern Ireland bank accounts by customers living in the Republic in an attempt to avoid paying tax.
The Revenue has declined to speculate on how much will be recovered by the investigation. But an earlier investigation into the tax affairs of customers of the Bank of Ireland Trust company in Jersey netted more than €100 million in unpaid taxes from 254 people. In a related development, a number of customers of the trust are preparing to take legal action against the bank, claiming it exposed them to excessive tax liabilities.
Recent figures from the Revenue suggest tax evasion is still widely practised. Last December, five tax defaulters paid more than €1 million each in settlements with the Revenue. And, in the three months to September last, a total of €43 million was collected from 371 tax-evading citizens.
