The compliant taxpayer is entitled to be dismayed and angered by the revelations in Magill magazine that the Revenue Commissioners allowed Allied Irish Banks to pay only a fraction of the £100 million it estimated it owed the State on thousands of bogus, non-resident accounts. This episode will confirm the impression formed by a sequence of such revelations from Ansbacher to National Irish Bank (NIB) that while all citizens are supposed to be equal in the eyes of the Revenue some - notably the financial institutions and those in big business - are a great deal more equal than others.
Magill deserves commendation for the manner in which it has exposed the brazenness of AIB and the astonishing compliance of the Revenue Commissioners. Despite all the blather about accountability, it seems that the financial institutions and the Revenue have been allowed to operate in this instance without the governmental supervision and overview that is taken for granted in other modern States. The Taoiseach, Mr Ahern, and the Tanaiste, Ms Harney - who apparently needed Magill to inform them of the arrangement between AIB and the Revenue - are now promising a rigorous inquiry and corrective action. Mr Ahern, who says that this will involve "several" financial institutions, insists that all tax liabilities will have to be paid in full. Not for the first time, in the world of taxation and big business, there is the jarring sound of stable doors being locked after the horse has bolted.
In truth, the AIB case is probably no more than part of the picture. Last April, the Sunday Independent revealed that AIB alone held 53,000 bogus non-resident accounts. At about the same time, The Irish Times reported disturbing practices in the operation of non-resident companies. The necessity for additional regulatory measures is now beyond dispute. Ms Harney and the Minister for Finance, Mr McCreevy will shortly bring joint proposals to Cabinet. It is already clear that the regulatory role of the Central Bank - which gives priority to its prudential role, ensuring that the banks are properly capitalised and are operating sound lending and funding policies - must either be stiffened or transferred to another body. From the revelations of the McCracken inquiry to the NIB scandal and this latest expose the role of the Central Bank has been remarkable for its non-effectiveness. It begs the question: is it worth having a regulator who does not appear to regulate, a supervisor who does not appear to supervise?
The powers of the Revenue may also require review: the requirement that a bank must have the name and branch of any suspect account before it can be examined by the Revenue must be changed. In the wider public interest, the Revenue should be entitled to undertake a general trawl of bank records when there is prima facie suspicion of evasion. In the interim there is much that AIB and the Revenue should do to explain themselves. Given the disturbing nature of the Magill revelations, there is an onus on the bank to release all documentation - including reports of internal group audits and board meetings - in the case and to reveal the decision-making process which led it to these bizarre arrangements with the Revenue. For its part, the Revenue should indicate who authorised the relevant officials to agree its secret sweetheart deal with AIB. If the fullest rigours of the law have to be applied by way of penalty so be it.