Legislation giving the Dail Committee of Public Accounts extra powers to investigate the alleged non-payment of Deposit Interest Retention Tax (DIRT) by Allied Irish Banks passed all stages in the Dail.

The Minister for Finance, Mr McCreevy, said the Comptroller and Auditor General and Committees of the Houses of the Oireachtas (Special Provisions) Bill 1998 had been tailored to carry out one inquiry into how the Revenue Commissioners and financial institutions - and perhaps others - comported themselves relating to collecting DIRT.

"We are not putting in place elaborate or bureaucratic procedures: these arrangements will, in effect, cease when the inquiry is completed."

He recalled that the issue first surfaced in an article in Magill magazine in October. The committee's proceedings so far had brought to the surface a fundamental conflict about the administration of DIRT between the Revenue Commissioners and AIB.

The committee had realised that its existing powers would not be sufficient to further its investigation into the matter, and it had made a series of recommendations about how best to proceed.

The key points were that the Comptroller and Auditor General should be requested by the Dail to prepare a report and be empowered to conduct a thorough investigation. On receipt of the report, the committee would then continue its examination of the key issues using enhanced powers under the Compellability Act and make recommendations on further action. These were, in essence, the arrangements made by the Bill, the Minister added.

Mr McCreevy said that focusing the statutory basis for the inquiry on the administration of DIRT would allow the investigation to concentrate squarely on the central issues:

Was there an agreement between the Revenue Commissioners and a financial institution (and in particular AIB) relating to undeducted DIRT during the early 1990s?

If so, what was the basis and nature of that arrangement?

Were the systems, practices and procedures of the Revenue Commissioners adequate relating to the administration of the DIRT? Were those systems properly implemented during the relevant period?

Did the financial institutions exercise their statutory duty of care in satisfying themselves that relevant accounts were genuinely non-resident?

Were the financial institutions aware of the existence and extent of bogus non-resident accounts?

If they knew, what did they do about those bogus accounts? If not, why not?

Mr McCreevy said he wanted to assure those who had evidence to give to the Comptroller and Auditor General that they were not at risk of criminal prosecution. At the same time, should the Comptroller come across prima facie evidence of non-payment or underpayment of tax, he could draw that information to the attention of the Revenue Commissioners.

However, he could not publish names or use any other means of identifying individual accountholders in his report to the Dail.