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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
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-
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