The Gazette 1975

Dail Eireann FINANCE BILL 1975—COMMITTEE STAGE 23 APRIL 1975 Part III

Mr. R. Ryan: We are dealing with tax evasion, an illegal activity. Under the 1974 Act a person who has the benefit of assets which are transferred abroad is obliged to pay tax on them; prior to that, he had not, although it would appear that in any other country that I have had a look at, the Legislature has en- deavoured long since to tax income from assets which were placed outside the domestic jurisdiction. However, for some reason we went from decade to decade allow- ing people to place their money abroad to avoid paying tax here, but since last year they could do that no longer without committing a breach of the law. They would be evading tax. At present any person who now fails to disclose his right to the benefit flowing from assets placed abroad commits an offence. The obligation on solicitors is to furnish names and addresses. If the people liable to pay the tax, if the people who have transferred assets abroad, discharge their obligations in the first instance by making the proper returns, there will be no question of having to obtain names and addresses from anybody else. If they break the law and if other people have the information which would identify them, I cannot see that there is anything reprehensible or anti-liberal about it. There is no infringement of anybody's rights. A person who transfers assets abroad and fails to disclose is guilty of evasion. Mr. Colley: Yes, but there are many who transfer their money abroad and do not fail to disclose. Mr. R. Ryan: And in such cases the Revenue Com- missioners would not be chasing anybody else for the , information. It is only when they have reason to believe the information is not being disclosed that they will avail of this power. Nobody has any reason to fear if they are complying with the law. If they are not com- plying with the law, all we say is that the law should not afford them privileges and protection which are not available to others. It was suggested that I was saying something radical I would like to quote from an editorial in The Times of 1st April, 1938, which states as follows : A noble defender of the ethics of tax avoidance comes forward today in the person of the Provost of Eton. No one will attribute to Lord Hugh Cecil an insensitive conscience, but when he writes that if the tax-avoider "acts openly" and above board, and clearly conforms to the law, I can see no reason why he should not do anything the law allows in order to lighten the load of taxes. Law in England is the will of the people as expressed in Parliament; it is also the rules of conduct enforced by the Courts. The two senses should coincide, but in practice they often

diverge because Parliament has failed to express itself with sufficient accuracy or completeness. The oppor- tunity for legal tax evasion proceeds solely from this divergence. There are some areas which so closely resemble evasion as not to deserve the impassioned moral defence that sometimes is advanced in their favour. The fact that many of these practices are not defensible is recognised by the accountancy and legal professions themselves. From time to time they suggest ways of avoiding tax, but they accompany their advice with a warning that a person who engages in a particular practice may well find the Legislature taking a different view of the legitimacy of the practice in which they are advised to engage. It was suggested today that there was a line that could be very clearly drawn between evasion and avoidance. I have said I cannot share the tremendous moral indignation that some people tend to express at any criticism of tax avoidance. The Courts are the judges of the law as Parliament has recorded it, but if Members of Parliament exper- ience cases where people are frustrating the wishes of the Legislature, then they have a right, indeed I would consider it a duty, to bring it to the notice of Parlia- ment in order that the necessary amendments should be made in the law. Mr. Colley: But not to treat them as if they had broken the law before that is done. Mr. R. Ryan: No, I have not said that. What I am saying is that they are not deserving of the tremendous moral benediction that some people would seek to give them, to make it something that is noble and beyond criticism. When one sees the wishes of the Legislature being frustrated, as a legislator, one must take steps to correct the situation and when one is giving power, as the Dail and Seanad gave last year, to tax the profits on assets that are sent abroad, one must give power also to the Revenue Commissioners to enforce that law. Major de Valera: I am appalled that a Minister who, like two of his colleagues in this House, should appre- ciate the importance of what is involved, would take the casual, the amoral and the pragmatic attitude he has taken in this matter. The Minister can hardly fail to appreciate the point I am making. Therefore, in technical terms I must attribute to him, malice afore- thought. By a peculiar coincidence the people engaged in this debate so far are members of the legal pro- fession, two of whom are practising. As a barrister, I am a member of the other aspect of the profession although I have not practised for many years. There- fore, I should be absolved from any suspicion that I

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