The Government will provide the Dail Committee of Public Accounts with extra powers in its investigation into the non-payment of DIRT on bogus non-resident accounts, the Minister for Finance assured the Dail.

Mr McCreevy said the Government was fully committed to assisting the committee to advance its investigations as rapidly as possible and to reach an early conclusion. "We await the committee's own recommendations on what further assistance we can give to them to achieve this and we undertake to facilitate them with whatever powers or assistance Dail Eireann considers necessary and appropriate for this purpose."

Mr McCreevy was speaking du ring a debate in private member's time on a joint Government Lab our motion calling for extra powers for the committee. He stressed the Government's "complete intolerance of those who engage in tax-evasion and those who assist or abet tax-evaders".

Following the report of the McCracken tribunal, he had asked the Revenue Commissioners and his Department to look at whether new powers were needed in tackling tax-evasion. It was a wide ranging review and included the question of extra powers relating to bank accounts and the examination of the affairs of banking institutions. The outcome would be examined in the light of the report of the Moriarty tribunal so that whatever measures were considered necessary could be taken.

Mr McCreevy said that since its introduction in 1986, the DIRT system had collected about £2.5 billion for the State. While the annual yield was as high as £271 million in 1990, the amount collected had since fallen.

"The reduction in the yield reflects amongst other things the significant decline in interest rates, the introduction of the special savings accounts with their low rate of DIRT, and also the general decline in the standard rate of DIRT."

Labour's finance spokesman, Mr Derek McDowell, said he welcomed the Government's agreement to a revised motion in the Dail on the controversy.

He added, however, that the Public Accounts Committee had already strayed beyond its normal remit but with the voluntary co-operation of the individuals concerned. As soon as the committee "starts digging too close to the bone, the moment it hits a raw nerve, then as sure as night follows day, a High Court injunction will be sought to stop the committee in its tracks.

"The Labour Party believes that it would be very unwise for the committee to hold any further hearings until such time as its investigation has been put on a sound legal basis. This can only be done by passing this motion in the House."

The motion undertakes to give the committee any additional powers or changes in legislation necessary to enable it to complete its investigations. It also notes the committee's consideration of whether additional powers are necessary. It calls on the committee to examine and report on the circumstances surrounding the "purported settlement by AIB of its outstanding liability for DIRT" and to examine the use of non-resident accounts in the banking system generally for the purpose of tax-evasion.

Fine Gael, however, rejected the motion as "legally defective", and introduced its own amended version. The party's finance spokesman, Mr Michael Noonan, said the motion named no financial institution other than AIB. The practice of bogus non-resident accounts for the purpose of evading DIRT was widespread. His amended motion called for a full investigation into the evasion of DIRT through bogus accounts and demanded that "other relevant financial institutions" be included in the investigation. "The Dail is unwise to accept the motion before it because the motion focuses so particularly on AIB, as to give possible grounds for legal proceedings." The party demanded that all outstanding DIRT be paid in full by every financial institution and that the Minister should ensure its payment.

Fine Gael also called on the Revenue Commissioners to explain fully all its actions and asked the commissioners to state in what way their powers were defective and how this could be corrected.

Mr Noonan also requested a Central Bank statement stating where its present statutory remit ended and if it felt it had any responsibility to the consumer. He also called for an explanation of its opposition to a single independent regulatory authority.