Evidence by the Chairman of the Revenue Commissioners to the DIRT inquiry on the origins of a controversial order preventing tax inspectors from examining non-resident accounts has contradicted earlier claims by Revenue witnesses. The disparity arose over the controversial SIM 263, an order issued to tax inspectors in 1986 telling them not to inspect documents relating to non-resident accounts.
Previous witnesses told the Committee that the order had been drawn up by an officer in the technical services section who is now deceased. However, Chairman Dermot Quigley told the Committee he did not believe that the official concerned was responsible. Deputy Pat Rabbitte said that the development was quite significant as it contradicted what the Committee had been told for the past two days. However Deputy Rabbitte added that the Committee did not believe the earlier evidence on the origins of the order. Following Mr Quigley’s evidence, the Committee asked the Revenue Commissioners to produce staff records, in an attempt to establish the origins of the controversial memo.
Earlier, a former chairman of the Revenue Commissioners told the Committee that new legislation governing the Commissioners should be considered. However, Cathal MacDomhnaill, who was chairman from 1990 until last year, said that the independence of the Revenue Commissioners should be retained. Deputy Rabbitte said that the current inquiry had revealed that the board of the Revenue Commissioners was basically three men who met infrequently, had no agenda for meetings and did not take notes. Mr. MacDomhnaill agreed that the protection of details of individual taxpayers, which he described as "sacrosanct", could be examined.
Mr. MacDomhnaill also answered questions on why he rejected proposals drawn up by a senior tax inspector to deal with DIRT tax evasion through bogus non-resident accounts. He denied that he took an "all or nothing" approach to the problem and did not use the existing powers to investigate the banks. Mr. MacDomhanaill told the Comptroller and Auditor General that the report was rejected because it favoured a tax amnesty. However, he has been challenged on that view by Deputy Rabbitte, who said that there were several other measures proposed in the report, upon which the Revenue Commissioners never acted.
Mr. Quigley began his evidence today by defending the Commissioners. He said that the impression might have been given that they were a rudderless organisation without support and this was not the case. He added that the Revenue Commissioners had been given superficial powers and then castigated for not using them. He said that they had repeatedly asked for more powers in relation to the banks. He added that the happiest moment of his career was earlier this year, when the Revenue was given the go-ahead to break through the ring of steel, which had surrounded the banks for years.