By Andrew Bushe
DUBLIN — Powers that give the go-ahead for a major Revenue Commissioners backlash against tax dodgers are contained in Minister Charlie McCreevy’s Finance Bill, but there will be no punitive levy on the financial institutions — the so-called "Robin Hood" clause — because of concerns about the legality of such a move.
A name-’em-and-shame-’em provision ensures the identity of offshore tax dodgers and those in the now notorious Cayman Islands-linked Ansbacher accounts will be flushed out into the open for the first time.
In quarterly reports, the Revenue Commissioners will list details of who the defaulters are and the nature of the offense. This will happen even if they have already paid their existing liabilities and penalties.
The new powers allow the Revenue Commissioners to carry out a retrospective "look back" audit to 1986 of 37 banks and building societies to assess the level of Deposit Interest Retention Tax due.
The institutions will pay the costs of the audit of the cheating and could face an additional tax bill of hundreds of millions of pounds.
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The minister has also cleared the way for the Revenue Commissioners to hire outside auditors or accountancy firms to ensure a report on the situation is ready by September.
"I want to assure people that the Revenue Commissioners are conducting a very thorough investigation of all the 37 financial institutions and I’m certain sure that every pound that is due will be collected," McCreevy said.
"But the difficulty arises with this extra levy on top of the figures that the tax, interest and penalties will bring in which I would expect to be very, very, very significant."
The Irish government will also seize millions of pounds in dormant accounts, but new legislation will be needed. Seizing the dormant accounts was one of the recommendations of the hard-hitting all-party Oireachtas Public Accounts Committee report on DIRT scandal published in December.
McCreevy said work on the new laws was "considerably advanced" and would be published in the near future.
The PAC chairman, Fine Gael’s Jim Mitchell, said he was "gratified" the Revenue Commissioners powers the committee sought had been put in place just seven weeks after the report.
But Labor’s PAC member, Pat Rabbitte, was unhappy there would be no once-off levy on the banks. The PAC report recommended cash raised from the punitive levy be used for social purposes in communities in need and it became known as the "Robin Hood" clause.
Rabbitte did not accept that a levy would be unconstitutional. "There wasn’t any constitutional impediment in the 1980s when bank levies were applied," he said.
Special new provisions for stay-at-home spouses and care givers are also contained in the Finance Bill, which gives legal effect to December’s budget. They will allow them to earn up to £77 a week without disallowing their spouses from claiming the special tax-free allowance of £3,000. It will benefit up to 170,000 families.
These provisions attempt to answer the uproar and Fianna Fail backbench revolt that greeted some of his budget tax measures. Critics said were weighted in favor of two-income families and discriminated again women in the home.