The Gazette 1974

section is enacted in its present form. If the recommen- dation is accepted, it will put a curb on the curiosity of the officers of the Revenue Commissioners. It will com- pel them to' proceed on reasonable facts, pertinent to the purposes of Sections 57, 58 and 60, because they will have to establish on reasonable facts a prima facie case before they can embark on their interrogations or investigations. There was a discussion earlier on a recom- mendation of Senator Lenihan's about the phraseology used. He objected to the phrase "in the opinion of the Revenue Commissioners". I have never before come across this kind of phraseology in a legal document. Who are the Revenue Commissioners to "think"? The phraseology is most unparliamentary and unlegalistic. The words I suggest are infinitely superior. The Revenue Commissioners may "think" certain things under subsection (1) and then, under subsection (2), there is a wide range of transactions which they may investigate. Again, the wording in that subsection is: The particulars which a person must furnish under this section, if he is required by such a notice so to do, include . . . and a list of particulars which may be investigated by the Revenue Commissioners is set out. These are in- cluded. There is no exclusion of the kind of particulars which, I believe, would inevitably be investigated by officers who might be too conscientious and who might be tempted to deal with matters which had nothing at all to do with the purpose of this section. The remarks I have made about subsection (1) are equally applicable to the second recommendation in my name. Again, if that is accepted, it will limit their activities to reasonable matters and to facts. It will, at least, compel them to establish some kind of prima facie case before they proceed any further. Mr. M. J. O'Higgins: I detest this kind of section. I know Sen. Brosnan feels the same way as I do about it and, in his recommendations, he has approached this in much the same way as what might be called an "unadministration" practising lawyer would approach it. At the same time, we must look at the position as it is. This is a section designed to give the back-up sup- port necessary to the Revenue Commissioners to clamp down on tax avoidance. Once this is accepted we will have to be very careful about going too far in hamstringing the Revenue Commissioners in their work. The only pos- sible result of acceptance of the recommendations pro- posed by Senator Brosnan would be that it would leave the operation of the Revenue Commissioners in this field open to challenge in the courts. The aim of the recommendation is to take away discretion from the Revenue Commissioners, to force them to act on the basis of ascertainable facts and then leave them open to challenge as to whether or not they are operating in that way. I am doubtful about the result of such a recommendation. Subsection (1) as it stands refers to such particulars as they think necessary. It is suggested that "facts known to them indicate clearly to be necessary" be inserted in- stead. How is that indication to be arrived at? What is the indication to be given? To whom is the indication given? Is it given to the Revenue Commissioners? Effec- tively the position, as I see it, is that we are depending on what the Revenue Commissioners think of the situa- 240

future administration of the revenue code by expressing it would be desirable to discharge the obscurity from the section, an obscurity which has survived the atten- tion of the House of Lords. The second point is that there is no guidance in the section as to how the income of the non-resident is to he computed. Is it to be computed in accordance with the rule:; of Irish tax legislation or in accordance with the rules of the tax legislation of the country of resi- dence of the non-resident person and, if it be the latter of the two, what interesting possibilities remain for the tax avoiders? Mr. Ryan: I can speak in the comfortable knowledge that any opinion I express will not be quotable in court. No doubt it will be learned judges who will ulti- mately adjudicate on this. It seems to me that the proper income to take into account is the whole income from the assets. Otherwise the element of avoidance could continue. You could have a situation where a person would decide to build up a considerable asset abroad by leaving income abroad for a large number of years. Ultimately he would himself leave this country and then enjoy the untaxed income accumulation which he has built up outside the State or leave the income there and annually enjoy it by going to the south of France or somewhere else. I think you must take the whole income into account. On the question of whether it is the tax law of the country in which the asset lies or Irish tax which should apply, as it is an Irish asset then the appropriate law to apply would be the Irish law. As it originated as an Irish asset and is only exported for tax avoidance pur- poses, then Irish tax law would apply. Mr. Alexis FitzGerald: We seem to be taking the safer of the two possibilities. Question put and agreed to. Section 58 agreed to. Section 59 An Cathaoirleach: Recommendation No. 27 is cog- nate to recommendation No. 26 and it is suggested that they be debated together. Mr. Brosnan: I move recommendation No. 26 : In subsection (1), page 35, line 40, to delete "they think" and substitute "facts known to them indicate clearly to be". Subsection (1)—indeed the whole section—is objection- able to us on this side and, I am sure, to many Senators on the other side. It proposes to give powers to the Revenue Commissioners to pry and to spy into the private affairs and personal lives of citizens and, in doing so, it constitutes a serious threat to the liberty of the individual and to his right to privacy. The aim of my recommendation is to limit and re- strict the powers it is proposed to invest in the Revenue Commissioners. These are extensive powers enabling them to interrogate and to inves- tigate a large number of people, both lay and profes- sional, and this could eventually lead to a massive campaign of interrogation of citizens. This section could be open to abuse in the wrong hands and citizens could be victimised. Inquiries could be made into their entire background, into details of their personal lives; skeletons in cupboards could be unearthed and other matters, which had nothing at all to do with the officers of the Revenue Commissioners, could be disclosed. The proposed recommendation would do much to cut down abuses which, we fear, are bound to arise if this