Revenue wanted to deter banks from tax evasion

The former chairman of the Revenue Commissioners wanted to deter bank officials from engaging in tax evasion rather than to "terrorise" tax-evaders.

Mr Seamus Pairceir, Revenue chairman until September 1987, believed that confusion over a Latin word resulted in him reading in the newspapers of comparisons "between myself and several tyrants of the past".

He told the DIRT inquiry that he did not know anything about the SIM 263 document until a few months ago. (This is the internal instruction to Revenue inspectors preventing them from inspecting the declaration forms of non-resident deposit accounts.)

Mr Pairceir said in 1987 he did not think that bank officials would move from "being spectators to participants in tax evasion". He was "obviously wrong but I thought that at the time".

He did not dispute an assertion by the chairman, Mr Jim Mitchell, that the reason bank officials were as involved as widely as they were was because they were safe from inspection.

The inquiry heard that a minute of a meeting with the Bank of Ireland in February 1987 stated that Mr Pairceir planned to inspect declaration forms in provincial bank branches.

The main purpose of the inspections would be "to strike terror into tax-evaders in the locality", according to the note written by Mr Pat Molloy, a senior Bank of Ireland executive.

Mr Pairceir said there was a Latin phrase, in terrorem, which means "as a deterrent". That he said, would have been his view at the time that "even inspecting these declarations would at most be a deterrent, in terrorem".

He added: "Unfortunately, I suppose my Christian Brothers Latin in some way wasn't understood by Mr Molloy."

Mr Pat Rabbitte TD, suggested that it was an "ad hominem attack on Molloy".

Mr Mitchell said it was not the first time Latin had been used. The chief inspector of taxes, Mr Christopher Clayton, talked about "imprimaturs and nihil obstats".

Mr Pairceir said "there was a heavy tradition in the Revenue of Latin tags, in my time".

Mr Rabbitte: "Is that because you all came through the one academy?"

Mr Pairceir: "We came through a diverse number of academies."

Mr Rabbitte: "The bankers came through a very narrow stream, it seems to me."

He said Mr Molloy did not seem the kind of man who would come up with a phrase like "strike terror into the hearts or tax evaders".

Mr Rabbitte asked the former Revenue chairman what he did tell him about tax evasion and tax-evaders. Mr Pairceir said: "If I was thinking of deterring anybody, I was thinking of deterring the bank officials from participating" in tax evasion.