Politicians reluctant to give new powers for tax inquiry

Politicians of the main parties are reluctant to give a Dail committee extra powers to facilitate a full investigation of the non-payment of DIRT on bogus non-resident bank accounts.

Presented with the first opportunity to apply the Compellability of Witnesses Act 1997 to a matter of major public interest, Government and Opposition whips decided to postpone any decision on the amending legislation required to enable tax liabilities to be fully investigated by the Dail Public Accounts Committee.

All the party whips were concerned about giving a committee of politicians the right to send for peoples' tax files. "This would be a whole new territory," the Government Chief whip, Mr Seamus Brennan, said last night.

The party whips decided, at a meeting last night, to wait and see whether persons requested to appear before the Dail Public Accounts Committee (PAC) would co-operate voluntarily with its deliberations.

The chief executive of the AIB Group, Mr Tom Mulcahy, is due to give evidence to the committee today, as are the Governor of the Central Bank, Mr Maurice O'Connell, and the Chairman of the Revenue Commissioners, Mr Dermot Quigley.

Mr Brennan said all the party whips would "strongly encourage AIB and others to co-operate without involving us in the exercise of changing legislation". The Minister for Finance, Mr McCreevy, said yesterday he had not asked the chairman of the Revenue Commissioners whether there was a settlement with AIB "nor do I intend to do so". Last Tuesday Mr Quigley told the committee that no "sweet deal" was done between AIB and the Revenue over DIRT tax. Mr McCreevy's attitude was sharply criticised by the Fine Gael spokesman, Mr Michael Noonan, who said it was "inexplicable" that the Minister thought he had absolutely no responsibility to do anything to recover the amount of tax due or to establish the truth as to what occurred in 1991.

Based on correspondence published in yesterday's Irish Times, Mr Noonan said it was also inexplicable that the chairman of the Revenue Commissioners told the committee on Tuesday that there was no settlement between Revenue and AIB.

Responding to questions from the Labour leader, Mr Quinn, the Taoiseach indicated to the Dail yesterday that the Government would have no difficulty amending the Compellability of Witnesses Act to enable the PAC to investigate tax affairs. But he wanted to assess the legal ramifications of such a move.

Mr Ahern said he appreciated that "somewhere along the line the committee's powers will prove inadequate" because Section 5 (1) (f) of the Act excluded the taxation issue. It related to information kept for the purposes of assessing the liability of a person in respect of a tax, duty or other payment.

Having considered the matter, the Government whip, Mr Brennan, indicated that the Government was hesitant to pursue that route to procure tax documents.

The chairman of the PAC, Mr Jim Mitchell, suggested privately to the parties yesterday that he would favour using Section 7 (2) of the Comptroller and Auditor General Act, 1923, as the avenue of investigation. That Section, which has never been used, empowers the Dail to ask the Comptroller and Auditor General to undertake an investigation on its behalf.