The Public Accounts Committee (PAC) will continue to press for Irish financial institutions to make a payment to a designated cause in reparation for their role in facilitating tax evasion through bogus non-resident accounts.
Such a payment would be in addition to the payment of any tax liabilities, interest and penalties demanded by the Revenue Commissioners, according to PAC chairman Mr Jim Mitchell.
The committee, which reconvenes on Tuesday, is due to hear proposals for reforms in the organisational structure of the Revenue Commissioners. It will also get an update on the progress being made in the look-back audits initiated by the PAC throughout the Irish financial sector to recoup taxes owing to the Exchequer.
Following the PAC's inquiry into DIRT tax evasion in the 1980s and 1990s, the total amount the Revenue Commissioners could collect from the banking sector may be £200 million or more. AIB and ACC Bank are expected to face the biggest tax demands.
Mr Mitchell says that while the PAC's proposal to apply a punitive levy on the banks is impossible under the constitution, he will be calling on the relevant institutions to make a collective pledge to donate a percentage of their profits to benefit the less well-off. "Financial institutions were in a position of great trust and they breached it. An act of reparation is warranted," he said.
"In a booming economy, it would be remiss of the banks if they did not come together and give a percentage of one year's profits to those who couldn't have had overseas accounts, such as deprived children or social welfare recipients," he said.
Representatives from the Government, the Department of Finance, the Central Bank and the Revenue Commissioners will appear before the committee next week to update the PAC on progress made in implementing its recommendations.
Six months after the PAC report, the committee is expecting to receive detailed proposals on structural changes at the Revenue Commissioners. It will be asking Central Bank governor Mr Maurice O'Connell to outline the initiatives put in place to address regulatory weaknesses.
A report from the Department of Enterprise, Trade and Employment is also expected to advocate radical reform in auditing practices. There is some suggestion that this report may not be completed by Tuesday, but if this is the case, Mr Mitchell says the committee would adjourn the hearings for two weeks to allow for its completion. The Revenue Commissioners chairman, Mr Dermot Quigley, will also inform the committee of progress made in its look-back audit programme. The Revenue has been auditing all financial institutions and will be raising assessments in the coming months.
Mr Quigley will tell the committee whether any additional powers are needed to finish its audit and whether new legislation may have to be introduced to facilitate structural changes at the organisation.
Mr Mitchell says the Revenue has been taking a pragmatic approach throughout the audit process and has listed a series of examples where documentary deficiencies will not incur tax liabilities. He does not expect the Revenue to be able to give details of any potential DIRT liabilities this week, as the audits are now nearing completion. Mr Mitchell says some financial institutions have been more co-operative than others with the Revenue during the course of the audit. Some are anxious to settle tax liabilities, while others are expected to appeal the Revenue assessments. All of the financial institutions called before the hearings have been invited to send a representative to the PAC session next week.
