The Gazette 1975

FINANCE BILL, 1975 : COMMITTEE STAGE (RESUMED) Continued from page 184

Mr. R. Ryan : As I indicated last night, I am sat- isfied both from rulings of Irish Courts and rulings of Courts elsewhere, that the legal position is that this power may only be used by the Revenue Commission- ers i n a reasonable way. If they act unreasonably the Courts will condemn their action. If they use the power to acquire information they may use it only to the extent necessary to obtain the information for the pur- pose of stopping tax avoidance. If they extend it be- yond that then the Courts will block the action they want to take. Th e wording of the 1974 Act ensures that the Rev- enue Commissioners will act reasonably and it is not, therefore, necessary to dress up the words in what Deputy Colley regards as softer and milder language in order to ensure that the power is exercised in a reasonable way. The amendment achieves nothing that the statute and the interpretation of the statute by the Court achieves. Mr.Colley: I will tell the Minister the kind of people I know who are concerned. They are those who are con- cerned with the rights and protection of citizens and they are not prepared to say that unlimited powers may be given to the Revenue Commissioners to enable the Revenue Commissioners to deal adequately, in their view, with people who are avoiding tax liability by acting within the law. The Minister should be under no illusions about this. If one is prepared to grant unreasonable powers to the Revenue Commissioners—for instance, to get after the most blatant avoiders of tax—then it is only a short step until exactly the same powers will apply against all citizens, whether or not they are trying to avoid tax. Mr. R. Ryan : I believe all taxpayers should receive equal treatment under the law in so far as it is possible to ensure that. The overwhelming mass of people are affected by section 178 of the 1967 Income Tax Act, under which all details of an employee's income must be furnished by an employer to the Revenue Com- missioners. It is as simple as that. It must be done. Section 59 of the 1974 Act says that the Revenue Commissioners may by notice in writing require a per- son to furnish the information which they think nec- essary for the purpose of preventing the avoidance by individuals of tax liability by transfer of assets. If the Legislature in its wisdom considers it necessary that employees do not avoid their tax liability and imposes on their employers the obligation of revealing full de- tails of the employee's incomes, surely it is not un- reasonable to require people who have information about the transfer of assets abroad for the purpose of tax avoidance to be under a similar obligation? Mr. Colley: Section 178 sets out precisely the infor- niation that can be sought. This section does not.

Surely the Minister can see the difference be- tween a section which sets out precisely the in- formation which the Revenue Commissioners can seek and, on the other hand, a section like this which says they can seek whatever information is necessary? There is an enormous difference. Mr. R. Ryan: I would like to point out to Deputy Colley that section 59 (3) séts out the information which the Revenue Commissioners may obtain. They cannot go beyond what this section gives them power to do. He says his only objective is to ensure that the Revenue Commissioners act reasonably I am saying that under the law they cannot but act reasonably. If they depart from that the Courts can condemn them for it. If we were to replace the words "think necessary" by the words "may reasonably require" the same test would be applied by the Courts. It would be no more and no less than that. Of course, from time immemorial, since tax was first imposed, there has been a battle of wits going on be- tween taxpayers and tax collectors. If that battle is won by a person who is liable to tax, then the burden on other taxpayers becomes so much greater. If the Leg- islature accepts its obligation to maintain equity, if it accepts it has an obligation to spread the load evenly, then it must strengthen the hands of the Revenue Commissioners to prevent tax avoidance. Major de Valera: The Minister never misses a chance of trying to knock one section with the plea that the employee or the poor ordinary taxpayer will be caught anyway. I want to leave that kind of specious, political approach out of the matter as we are on the Committee Stage of a serious Bill. What would a judge ask for it he had to deal with this? The protagonists in this have legal experience. What are the judicial interpretations in this? The Min- ister has only mentioned one. There have been cases and there have been interpretations. What is the rele- vant state of the law from the point of view of inter- pretation in regard to this matter? Those Bills are com- ing so fast that it takes a lot of time to pursue such a point. The question of interpretation may cause trouble for all those Finance Bills which are before the House. I, like many others of the community, was too prone to adopt the point of view that the Revenue Commis- sioners were unrealistic publicans and tax gatherers in the gospel sense and that they should be anathema and defrauded and defeated at all points because they were grabbers. I was appointed by the House to the Committee that reviewed the various Finance Acts and then I realised the truth—that we had in this organ- isation a very responsible and fair-minded organisation which did its duty to the State, carried out its respon- sibility and respected the rights of the citizens as best and as fully as it could. I am able to make this state- .191