Dáil Éireann - Volume 436 - 30 November, 1993
Written Answers. - Income Tax Liability.
Mr. McGrath Mr. McGrath
89. Mr. McGrath asked the Minister for Finance his views on the fact that the tax liability of a taxpayer with £1,000 income in 1984/1985 taxable at 65 per cent but unpaid up to now, consisting of an amount due of £650 tax plus £877.50 interest giving a total of £1,527.50, may now be settled for a sum of £150, under the tax amnesty whereas a PAYE taxpayer would have paid £650 in 1984/1985 for the same taxable income.
Mr. McGrath Mr. McGrath
90. Mr. McGrath asked the Minister for Finance if it is equitable that tax due at 60 per cent in the year 1986 and still owing to the Revenue Commissioners can now be cleared at 15 per cent, which is a quarter of the actual liability and that interest due of more than 105 per cent and liabilities can all be written off under the tax amnesty whereas the PAYE sector can never avail of such generous facilities.
Minister for Finance (Mr. B. Ahern) Bertie Ahern
Minister for Finance (Mr. B. Ahern): I propose to take Questions Nos. 89 and 90 together.
The Waiver of Certain Tax, Interest and Penalties Bill provides the basis for the tax amnesty, the primary objectives of which are to
—obtain the best possible yield from undisclosed tax liabilities for the period up to 5 April 1991, given that such liabilities are difficult to detect
—to facilitate the use for the purpose of general economic activity and employment of those funds, related  to tax evasion, which have up to now held dormant, and
—to give those who failed to meet their tax obligations in the past one last chance to put their tax affairs in order, in advance of more stringent penalties for tax fraud, and the continuing strengthening of Revenue's compliance programmes.
To achieve these objectives it was necessary to introduce an incentive for tax-payers to encourage them to bring their tax affairs up-to-date. However, this incentive is balanced by the introduction of stringent penalties for those who fail to put their tax affairs in order. The amnesty is not an option for those who failed to pay their taxes in the past. It is an obligation to which they must adhere under pain of penalties. Moreover, the benefits of the amnesty are only available to those who regularise all of their pre-1991 tax affairs and also make a full disclosure, on time, in relation to their present tax liabilities. The legislation also provides for new penalties which include mandatory prison sentences and fines ranging fron 25 per cent to 200 per cent of the tax evaded.
Taking the full view of both its “carrot” and “stick” elements, the tax amnesty is not just an absolution for past wrongs. It is a mechanism for bringing in those who have not met their obligations in the past and exposing them to their full liability for tax from this point on. This can only be to the benefit of all taxpayers.
Dáil Éireann 436 Written Answers. Income Tax Liability.