The Gazette 1975

abroad, not to do so is evasion and it is illegal. I will not accept that it is contrary to practice and that there is an encroachment on the necessary confidence which exists between clients and their solicitors. I would equally refuse to accept, speaking as a lawyer as well as a parliamentarian, that lawyers should permit their professional status to be used for the purpose of evading tax. If that were to happen and if it were to encourage. or facilitate evasion then the whole standing of the legal profession would come under a cloud. As far back as 1939 the same arguments Deputy Colley makes were produced in the British House of Commons when similar provisions were being discussed. The Solicitor General replying to the criticisms had this to say : . . . we are dealing here with an area where we are trying to prevent tax evasion by the transfer of assets abroad, and the Clause is really purely declaratory of the existing law. It suggests that certain particulars must be furnished by persons or by their agents in relation to these transactions so that the transactions may be identified. Subsection (2) to which the Amendment of the hon. Gentlemen applies preserves for solicitors the privilege that they enjoy at present. The only information that the Commissioners may request from solicitors will be information as to names and addresses and nothing else. They are not required to disclose documents or the instructions that they have received. This is a privilege which the profession of solicitors enjoys under the existing law by reason of a long history of case law. The accoun- tants enjoy no such privilege under the law. The hon. Baronet is asking for a privilege for accountants which no other agent would be per- mitted to have, and which solicitors only enjoy by reason of the existing law. Privilege is a valuable thing to conserve, but it is a very dangerous thing to extend. Privilege by its very nature means the obstruction of the truth. It is a barrier between the investigation of the truth and the actual arrival at the facts. It is not easy to justify in an area where you are dealing with deliberate evasion, and were it not for the fact that the privilege exists enabling a person to go to his solicitor for advice, and while it might be difficult to justify it, I should find it impossible to stand here and justify its extension to particular kind of agent, who, in many cases, is the very man from whom you want to find out what he knows about the transfer of assets abroad. I believe those words can be used with as much justifi- cation in 1975 as they could be used in 1939. We can also use them with the value of the experience of what bas happened in Britain in the intervening years. Confidentiality has been maintained between solicitor and client. The Exchequer, the general body of tax- payers, have not had to bear the enormous costs of some avoidance practices which would have gone un- checked if that power were not there. If we want to discourage people from running con- trary to the spirit of the legislation as well as to the letter of it, then we must ensure that if we are imposing obligations to pay tax we provide the Revenue Com- niissioners with the means to enforce those obligations. If we fail to do so then we are continuing an unjust

system in which the person of small means, who is an employee working for an employer who supplies in- formation about the income would have to pay his or her share of the tax while the clever and the rich, en- gaging consultants, could shelter behind them and avoid paying their share. That is not a desirable thing to happen. It need not happen as long as the powers conferred in the 1974 Act are not tampered with. The anti-avoidance action of the 1974 Act will ensure that, to a greater extent than was possible before then, the clever and the rich will not avoid their fair share of tax. The battle of the Revenue Commissioners against tax avoiders and evaders will go on forever. There will never be a victor. At most there will be a pyrrhic victory on one side or the other or a short-lived one. As the Courts have said on numerous occasions, people who engage in avoidance practices must accept that as they engage in them they are likely to suffer sooner or later the wrath of the Legislature, which will take action to prevent the continuance of the avoidance. People who engage in avoidance do so knowing that one of the occupational hazards is that legislation may be introduced to destroy their fun. It has to be intro- duced, not for the sake of being a kill-joy of the person engaged in avoidance practices, but out of a sense of fair play to the general body of taxpayers who have no opportunities of avoidance, no discretion in the matter and no knowledge or skill which would enable them to avoid paying the full share of tax which the Legislature intended them to pay. The people against whom this section is directed, the people engaged in the transfer of assets abroad, have a liability under the law now to pay tax. This is one of the necessary weapons that must be given to the Revenue Commissioners to ensure that obligation is complied with. Failure to do so would create a sham, as I s?ud earlier, and I could not be a party to that. Mr. Briscoe: I recognise it is the duty of the Revenue Commissioners to collect as much tax as they can. Pressure is very often put on them to be a little bit harsh. Mr. R. Ryan: That is not so. The Revenue Com- missioners act independently. Mr. Briscoe: I am left with nothing else but to believe this because of the kind of legislation which is before the House now. The Minister said he morally sees no difference between tax evasion and tax avoid- ance. In fact the basic difference is that one is illegal and the other is legal. I do not think there is anything wrong in a person seeking advice on how to make his or her tax return. The Revenue Commissioners can be co-operative but it is not their job to tell people what they can claim relief on. In my view there is nothing whatsoever wrong in a person going to a tax adviser, who very often is a solici- tor. If the Minister was out of government tomorrow and back in his practice or decided to give up politics and went back to his practice, would he refuse to act in an advisory capacity on a tax matter with a client? From what he has said here it seems to me he would refuse to talk to any client about how he might avoid a heavy bill for tax because he equates it with tax evasion. I believe that the Minister will breed a new kind of .220