The Gazette 1974

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

required

that

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,

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".

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