Noonan under fire in €10m VAT botch-up
A GOVERNMENT TD has rejected Finance Minister Michael Noonan's defence of his department's role in a €10m VAT blunder to do with the National Aquatic Centre, the Sunday Independent can reveal.
Fine Gael's Simon Harris is a member of the Public Accounts Committee (PAC), which last Thursday published a highly critical report into the State's eight-year legal pursuit of the VAT bill from the leaseholder of the NAC, which the Supreme Court found was illegal.
Mr Harris is to demand Mr Noonan reconsider his position on the VAT blunder given the heavily critical findings the PAC made against the Department of Finance.
Campus Stadium Ireland -- the State company which ran the National Aquatic Centre -- should never have pursued the legal battle with the former operator of the centre, according to the report.
The PAC found that even if the legal bid had been successful, it would have been of no benefit to the State. The Department of Arts, Sports and Tourism, Campus Stadium Ireland, the Department of Finance and the Revenue Commissioners were all found to have failed in their responsibilities to the State.
In particular, the Department of Finance was found to have "disregarded the provisions of the 2002 Finance Act when it advised Campus Stadium Ireland had no option but to pursue the VAT issue".
Mr Harris wrote to his senior party colleague, Mr Noonan, seeking his account of the Department of Finance's role in the blunder.
Responding to Mr Harris, Mr Noonan wrote: "I am satisfied that every effort is made to ensure that laws passed by the Oireachtas are interpreted correctly by my department and by Revenue. While the Supreme Court found that Revenue were incorrect in the interpretation of the VAT, that is not to say that Revenue consciously applied incorrect VAT treatment for eight years."
Mr Noonan added: "On some occasions, Revenue's interpretation is found to be correct and on others not. Different courts take different views."
However, Mr Harris rejected Mr Noonan's defence of his department and its relationship with the Revenue Commissioners. He said he will call on the PAC to reject Mr Noonan's letter and demand a more accurate response.
Speaking to the Sunday Independent, Mr Harris said: "While I'm sure the Minister's defence of the procedures between the Department of Finance and Revenue were based on the information available to him, there is no escaping the simple fact that Revenue failed to correctly interpret VAT law."
Mr Harris added: "This is no small mistake and it cannot be tolerated. In light of our report, I will be asking PAC to write to the Minister for Finance and ask him to reconsider his position on the relationship between his Department and Revenue in light of our findings."