The Gazette 1974

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

there

adjudicate

upon

the

reasonableness

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

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

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

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.

242