The Gazette 1974

we have these provisions. Regarding the sanctions. They are the ordinary sanctions for non-compliance and there would be a fine up to £500 and a continuing fine of £10 per day until compliance with the requirement. There again it will be a matter for the Courts to a d j u d i- cate if refusal occurs so that the individual's rights are fully protected. There is no question, therefore, of an infringement of the rights of the individual. The law in Britain has been challenged. The reason- ableness of notices has been challenged. One such notice was what one might call a "fishing" notice. In the full sense it was like casting a net on the waters to see what the net would bring in but the courts expressed the view that the Revenue Commissioners were entitled to investigate and that they had to investigate in order to ascertain facts. Question : "That the words proposed to be deleted stand" put and declared carried. Recommendation declared lost. Recommendation No. 27 not moved. Mr. Brosnan: I move recommendation No. 28 : In page 36, to delete subsection (3). There are two recommendations here. The first is impor- tant and has been referred to already. The purpose of the recommendation is to preserve and protect the legal principle which this section seeks to erode and to under- mine. The Minister, as a lawyer himself, is well aware that all transactions between a solicitor and his client are absolutely privileged and that the solicitor may not, except on very, very rare occasions, disclose any infor- mation received from his client in the course of his pro- fessional business without the expressed consent of the client. This also extends to members of a solicitor's staff} to his clerk, to his partner, and I presume, also to typists, secretaries and other members of the staff. D also extends to barristers. This relationship between solicitor and client has been long established and it i s time honoured. It has been accepted, respected and practised by members of the Minister's profession over the centuries. It is a secret and sacred relationship and is enshrined in the law of this country. This basic change in the fundamental principle of our law came as a shock and as a surprise to all members of the legal profession and, of course, to the general public who depend so much on solicitors for advice and assistance in their private affairs, including their financial trans- actions. As the Minister is aware, there is strong opposi- tion from the Incorporated Law Society. I have here a copy of a letter which was written to the Press by the President of the Incorporated Law Society—I am sure the Minister has a copy—in which it is stated : The Incorporated Law Society of Ireland views with great seriousness the effect of Section 57 of th e Finance Bill 1974 at present before the Dail if this section is enacted in its present form. The section is designed to give powers to the Revenue Commissioners to require any person to fur- nish them with particulars relating to any transaction concerning the transfer of assets abroad and the pos- sible avoidance of taxation thereby and purports to require that solicitors among others shall be com- pelled to disclose information relating to their clients and their affairs. The Society does not in any way condone conceal- ment which avoids taxation properly payable and further appreciates that the information proposed to be required of solicitors is less than that which may be required of others.

right to avoid and evade tax. We must ensure that we do not bring in a provision here which says that assets which are transferred abroad are to be brought into the tax net and at the same time take no steps to enforce it. Quite clearly people who would be transferring assets abroad would have many occasions to go to their bank- ers and accountants and legal advisers in order to get advice in order to use their services. It would be ludicrous to allow such people to get professional advice for the purpose of avoiding answering questions. The references to solicitors and banks here are limi- tations on the rights of the Revenue Commissioners to seek information. One would assume from the com- ments that have been made here and elsewhere that solicitors would be obliged to answer everything. That is not so. They are primarily required to declare the name and address of the person on whose behalf they have been acting and to declare the name and address of associated companies and operations. Of course all that is absolutely necessary because one of the easiest ways to operate tax avoidance is to do it by means of associated operations and, when they are identified, then the Revenue Commissioners can pursue the indi- vidual or the operation which has been identified through it. The Courts will be there to adjudicate upon the reasonableness of the Revenue Commissioners. If they use this power unreas- onably, anybody may challenge the exercise of the power by the Revenue Commissioners and one can be confi- dent that the Courts will not allow the Revenue Com- missioners to use this power in an unreasonable way nor may they use it for any purpose other than that of combating tax avoidance, that is what the language of the section says. Necessity is a much stricter word than the wording of the recommendation. Mr. Brosnan: In regard to having recourse to the Courts, there is no provision at all for an appeal. I want to ask the Minister three or four questions. First of all, is there any time limit at all on how far back the Revenue Commissioners can go in investigating situations like this? Secondly, is there any appeal from the decisions of the Revenue Commissioners, the deci- sion in relation to whether or not they should investigate facts or the decision in a cáse where a person refuses to give the information? I want to know if there is any appeal agáinst that refusal on the part of an indi- vidual? Thirdly, I would like to know how the Minister proposes to enforce this subsection and the other sub- sections in the case of refusal on the part of an indi- vidual or a solicitor or others to furnish the information sought by the Revenue Commissioners? Mr. Ryan: First of all, if a person is of the view that the Revenue Commissioners are acting unreasonably they may challenge the Revenue Commissioners' deci- sion in Court. This is the ordinary right. Mr. Brosnan: On the question of being unconstitu- tional. Mr. R. Ryan: Unconstitutional or being unreason- able in the exercise of it or being unnecessary for the purposes of the section. Mr. Brosnan: Does the Minister agree that the whole section is certainly bordering on being unconstitutional? Mr. R. Ryan: I can speak as a lawyer as well as a Minister and if this were repugnant on legal grounds I would not be recommending it to the House. I am satisfied that the protections here are the proper pro- tections to have. I am also satisfied that the law, which we must ensure is respected, cannot be enforced unless

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