Madam, - I should like to express the view, perhaps politically incorrect, that settlements imposed in the recent Revenue campaign for the recovery of unpaid tax on offshore accounts may be unjust.
I believe this to be true because of the application as mandatory of statutory rates of interest. These, when they were devised, may have been justified as equivalent to then current rates but over recent periods are penal in the extreme. The effect, particularly on older taxpayers, is to give rise to extremely heavy penalties often leading to the sequestration of the total amount of existing funds, even where there was no underlying tax unpaid.
The massive effect of excessive rates of penalty interest over long periods appears not to be appreciated, or, worse, to be ignored, by Government, Revenue and Opposition parties all of whom should, in my opinion, have been concerned to have them amended.
The proposed treatment of offshore account holders is significantly more penal than that recently accorded to bogus non-resident account holders. The latter class was accorded a credit for tax on interest earned.
Perhaps even more significant was the concession that interest on the unpaid tax was not charged. It is this interest which is the villain of the piece. Levied at excessive rates, it is always a penalty. The application of the levy over a greater number of years compounds the significance of the penalty.
It was rare in the case of bogus non-resident accounts for the settlement to be more than a proportion of the offshore deposit unless there had been underlying unpaid tax when the deposit was created. This will not be the case with the proposed treatment. Moreover, the greater the time since the default was first made (the greater the age of the defaulter) the more excessive the penalty will be. - Yours, etc.,
NIALL McGAHON, Francis Street, Dundalk, Co Louth.