Former lord mayor of Dublin Mr Michael Keating has paid the Criminal Assets Bureau (CAB) €250,000 in unpaid taxes.
Last August, Mr Keating - who has been under investigation by CAB for over three years - was served with a demand for over €1 million in back taxes.
Mr Keating, a former Fine Gael Minister of State, sold his house in Castleknock earlier this year for over €1 million.
In 2000, Mr Keating was named in Middlesex Crown Court as a "partner in crime" in a £20 million sterling VAT fraud involving the export of non-existent computer parts from Britain. A Limerick man, Daniel O'Connell, was jailed in August 2000 for eight years for his part in the fraud.
Mr Keating denies any involvement, claiming he has been "massively smeared". He cannot be extradited to Britain because of an Anglo-Irish agreement that rules suspects in fiscal matters are not subject to extradition.
In October 1997, Mr Keating was arrested and questioned by gardaí. Information was then passed on the CAB. When he was arrested, he was carrying two bank drafts worth £48,000 made out to a known Dublin criminal.
In February 1998 a claim was made in the High Court that Mr Keating was a director of a company being investigated by the CAB regarding alleged drugs money-laundering. He denied the claim.
Mr Keating is a former Fine Gael junior minister in the Fitzgerald government of the 1980s. He defected to the Progressive Democrats, becoming the party’s deputy leader until he quit politics in 1989.