The response of the Revenue Commissioners to the report of the Dunnes Stores payments-to-politicians tribunal will have far-reaching implications for the credibility of the tax system. The report concluded that the offshore routes through which both Mr Haughey and Mr Lowry received money from Mr Ben Dunne were designed to hide money from the Revenue Commissioners. And in a particularly hard-hitting conclusion on Mr Lowry's affairs, the report says that if he is not subject to serious sanction, then "it becomes very difficult to condemn others who similarly flout the law".
The Revenue Commissioners have said that any action needed to safeguard the implementation of the tax system is being taken. By this stage they will surely be in detailed discussions with Mr Lowry on his tax situation, given that many of the details of payments from Dunnes Stores have been in the public domain for some time.
While Mr Haughey has only recently conceded that he received £1.3 million from Mr Dunne, it will not take the Revenue long to check whether the appropriate tax payment has been made. A tax liability of over £1 million, including interest and penalties, would now be payable on the gifts from Mr Dunne to Mr Lowry, assuming a settlement has not already been agreed. In the case of the tax evasion pointed to in the report, justice must not only be done, but must be seen to be done. Compliant taxpayers will be understandably outraged that a former Taoiseach and a former Minister both used offshore accounts to hide money from the Revenue Commissioners. As a first step, full tax and penalties must be levied where appropriate and the details published in the Revenue Commissioners annual report. Behind-the-scenes deals will not do. And the blatant breaches of exchange control rules which appear to have taken place must also be pursued.
The Revenue Commissioners also have other powers, which they must surely consider using. They can ask taxpayers to provide details of income and assets and fully investigate all aspects of their tax affairs.
And in many cases they now have powers to pursue a criminal prosecution, particularly under the 1993 Tax Amnesty legislation. The amnesty provided a once-off chance for tax evaders to sort out their affairs, but brought in heavy penalties for those who did not take the opportunity.
Mr Lowry appears to be particularly exposed in this area. He has admitted that he availed of the 1993 amnesty. But it has since emerged that much of the money he received as income from Dunnes Stores was not declared for tax. If this can be proved in court, then it is a serious criminal offence. And successive governments have promised that tax evaders will be pursued through the courts; how many times have we been promised a "crackdown" on tax dodgers? The amnesty left a bad taste in the mouths of many taxpayers. But to avail of the amnesty and even then not declare a substantial proportion of income is an extraordinarily arrogant way for anyone to act, never mind a senior politician. If Mr Lowry is not pursued through the courts, then the tax legislation will lose credibility in the public view - and understandably so.
Finally, some way must be found to discover - if at all possible - what other Irish residents had money hidden in the so-called Ansbacher Deposits, the offshore accounts which held as much as £38 million at one stage. And if this means bringing in new legislation, then so be it.