The Gazette 1974

so that a solicitor may be directed to reveal particulars to any investigator appointed by the Revenue Gommis- sioners in cases involving clients of his. This is a very dangerous area. It is like the situation in George Orwell's "1984". I would not mind this if there was massive avoidance going on in this country where millions of pounds were involved. All this is eroding confidence on the part of investors in this country and helps to drive money out of here. With that type of legislation we are going to kill any incen- tive to investment. I suggest that we maintain the civilised phraseology that has always been part of finance legislation and that we respect the basic rights of citizens in their liability to the State to pay tax. The Revenue Gommissioners have the respon- sibility of checking tax avoidance and they must investigate. I am not denying this. All I am saying is that they should proceed to investigate on the basis of facts which indicate clearly to them that there is tax avoidance by certain people. We should insert words to show that there is basic legal protection for the citizen, and to indicate that they cannot just proceed on a total widespread draconian basis without any regard to facts. Mr. R. Ryan: The picture of this being a provision invented by a radical Government is ludicroils in the light of historical facts. The first time a section of this kind was written into the laws of these islands was by a cautious, considerate, Gonservative British Government under Mr. Neville Gahmberlain, in the 1939 Finance Bill, and it provided exactly what the Republic of Ireland is daring to provide in 1974. That takes care of the highly emotional speech we heard from Senator Lenihan and of much of the criticism that has been voiced elsewhere since this provision was first announced. Neville Chamberlain was the man who declared war against Nazism. Britainn fought successfully a war against Nazism. In England they hold very strong views about the rights of the indivi- dual; these are much stronger than they are here. We have the shame of being the only Parliament in Europe which introduced compulsory, statutory medication, so much did we respect the rights of the individual. At least Britain and other European countries have not done this; I do not think any country in the world has done it. Suddenly there has been a great emotional outburst because we have provided in this legislation the absolute minimum back-up service which must be given to the Revenue Commissioners if they are to take steps to stop tax avoidance. Senator Brosnan's recommendations would comple- tely defeat the purpose of the section. If the Revenue Commissioners may only put questions when they know the facts there is no need for further investigation. The purpose of giving them the investigatory powers is to establish the facts. If they know the facts, if they know the wrongdoers, they can go after them. Remember we are dealing here not only with tax avoiders but tax evaders as well. Nobody has the right or privilege to avoid answering the lawful questions of the Revenue Gommissioners if those questions are for the purpose of ascertaining a person's income. Nobody has the right to refuse that information and if any person does refuse they do so at their peril. That is as it should be. No profession or banking institution enjoys a privilege in its own right. Any privilege it has is because its clients have a privilege, but privilege does not extend to the 241

tion. What they think of the situation will ultimately determine whether or not they seek the information required in this section. Senator Brosnan suggests they required in this section. What other way can they form an opinion except on facts known to them? I am not sure that it would effectively achieve any difference in actual operation or result. The same remarks apply to the second recommen- dation. When tax avoidance machinery is being set up with the intention of making it effective so far as this operation is concerned, the necessary back-up service in the legislation has to be provided. As a practising lawyer—never being in the position as far as litigation is concerned of acting on behalf of the Administration in any sense and possibly regarded as a defendant law- yer rather than an Administration lawyer—my natural reaction is against this kind of section. Mr. Lenihan: I endorse what has been said by Sen. Brosnan. Senator O'Higgins believes in his heart of hearts that this sort of section is all wrong and that these recommendations are designed to cure some of the very serious ills incorporated in this section. Tax avoidance measures, a general clamp-down on control of the economy attitude-of-mind can be taken too far. This has been clear from what we have seen in recent months. We have had a massive outflow of funds from this country by reason of a lack of confi- dence on the part of the business community. I am coming to the section itself. If we write into a subsection of an Act which contains a Gestapo-like marginal note : "power to obtain infor- mation"— Mr. Alexis FitzGerald: The "Gestapo" being the British Labour Party. Mr. Lenihan: That is why the British economy is in precisely the same situation as we are. A similar type of operation has been carried on there. It is the height of lunacy for an Irish Government to imitate a British Government, particularly when there is no confidence in the British economy. Section 59 states : The Revenue Gommissioners, or such officer as the Revenue Gommissioners may appoint, may by notice in writing require any person to furnish them within such time as they may direct (not being less than twenty-eight days) wich such particulars as they think necessary for the purposes of Sections 57, 58 and 60. "As they think necessary"—legislation of that kind could Well be found in some of the new African states. We have always had in the Oireachtas an attitude whereby there is a basic legal protection in every section dealing with the public in regard to tax matters. All that is required is that we put in here a legal directive that the Revenue Com- missioners cannot proceed except on the basis of facts that clearly indicate to them that there is avoidance of the nature envisaged to be prevented. That would appear to me to be an eminently reason- able safeguard. The phraseology which we incorporate there means that the Revenue Commissioners can only proceed on the basis of facts that reasonably indicate to them that the particular tax avoidance they envisage is involved. If we use phraseology such as "they think" and if we give them power to order by notice in writing to furnish such particulars as they think necessary, this must be considered in conjunction with other phrase- ology to which I referred earlier and indeed to the provision where the privilege which exists between a solicitor and client is sought to be destroyed,